Cloud computing and cybersecurity company Cloudflare is preparing for what it calls the “agentic AI era” by reducing its workforce by more than 1,100 employees worldwide, even after reporting strong financial growth.
The company recently announced impressive first-quarter 2026 results, with revenue climbing 34% year-over-year to nearly $640 million. Cloudflare also revealed it now has more than 4,400 customers spending over $100,000 annually, while operating profits reached $73.1 million.
Despite the strong performance, company leaders say the layoffs are part of a broader shift toward integrating artificial intelligence deeper into daily operations. In a message shared with employees, Co-Founder and CEO Matthew Prince and Co-Founder and President Michelle Zatlyn explained that the decision was not based on employee performance or cost-cutting, but on restructuring the company for an AI-driven future.
Cloudflare says internal AI usage has surged by more than 600% in the past three months. Teams across engineering, finance, HR, and marketing are reportedly using AI agents daily to streamline work and improve productivity.
During the company’s earnings call, Prince expressed confidence that affected employees would quickly find opportunities elsewhere. Cloudflare now joins major tech firms like Oracle, Meta, and Amazon, which have also announced workforce reductions while increasing investments in artificial intelligence technologies.