Cloudflare to Cut 1,100 Jobs, Citing AI-Driven Productivity Gains

Cloudflare is laying off approximately 20 percent of its workforce, or about 1,100 people, in what co-founder and chief executive Matthew Prince called the company's first mass layoff in its 16-year history. The job cuts were announced Thursday alongside the company's first-quarter 2026 earnings report. Cloudflare posted quarterly revenue of $639.8 million, a 34 percent increase from the year-ago period and its highest single quarter on record. The company also reported more than $2.5 billion in remaining performance obligations, a metric indicating contract revenue not yet delivered, which rose 34 percent year over year. Despite the revenue growth, Cloudflare recorded a loss of $62.0 million, compared with a loss of $53.2 million in the same quarter last year. Prince said the reductions were not driven by cost-cutting or employee performance. In a blog post with co-founder Michelle Zatlyn, he wrote that the actions reflect how a "world-class, high-growth company operates and creates value in the agentic AI era." Prince said Cloudflare's internal use of artificial intelligence has increased more than 600 percent in the last three months. He said virtually the entire research and development team now uses the company's Workers platform and that 100 percent of AI-generated code deployed in products is reviewed by autonomous AI agents. Employees across engineering, human resources, finance and marketing run thousands of AI agent sessions each day, he added. The company ended the first quarter with a headcount of about 5,500. Prince said Cloudflare will continue to hire and predicted it will have more employees in 2027 than at any point in 2026.