Cloudflare is laying off 20% of its staff – some 1,100 employees, citing a 600% increase in AI use in the past three months and the need to be “intentional in how we architect our company for the agentic AI era."

The job cuts follow similar sweeping restructurings at the likes of cryptocurrency exchange Coinbase, which last week laid off 14% of its staff. 

(Coinbase CEO Brian Armstrong said the firm would be becoming an AI-centric “intelligence, with humans around the edge aligning it.”)

Cloudflare said in an SEC filing that the layoffs will cost it some $150 million.

CEO Matthew Prince and COO Michelle Zatlyn said in a blog that staff would receive the “equivalent of their full base pay through the end of 2026…”

US staff will continue to get healthcare through the end of the year, they added, saying “we are also vesting equity for departing team members through August 15th, so they receive stock beyond their departure date.”

The two wrote: “We’ve asked the team to do this only once, as hard as that may be today. We don’t want to do it again for the foreseeable future. 

They added: “By taking decisive action now, we provide immediate clarity to those departing and protect the stability of the team that remains. We are making these changes now because making smaller, repeated cuts or dragging a reorganization out over multiple quarters creates prolonged emotional uncertainty for employees and stalls our ability to build.”

The news came on May 7 as Cloudflare reported Q1 earnings.

The company reported first quarter revenue of $639.8 million, up 34% year-on-year. GAAP net loss was $22.9 million, trimmed from $38.5 million in the first quarter of 2025. It expects Q2 revenues to climb to $664 million.

CEO Matthew Prince said in an earnings statement: “AI is driving a fundamental re-platforming of the Internet and a paradigm shift in how software is created and consumed; it’s shaping up to be the biggest tailwind we’ve ever seen in Cloudflare’s history,” he added late Thursday. 

Cloudflare provides network security, distributed object storage, and AI inference on its global network and POPs, among a range of other services like DDoS protection, domain registration and managed DNS. 

Shares dropped 13% after-hours following the results, despite beating market expectations. The company’s shares have climbed 30% this year.

According to Layoffs.fyi, 98,689 tech employees have lost their jobs in 2026 so far; a figure that suggests numbers this year will notably outstrip the 124,201 total tech layoffs the website reported in 2025.

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