Cloudflare says AI made 1,100 jobs obsolete as revenue hits record high
Cloudflare ties layoffs to AI efficiency gains
Cloudflare said Thursday it will cut about 20% of its workforce, or roughly 1,100 jobs, in a move the company says is driven by AI-related efficiency gains rather than cost pressure. The announcement came alongside first-quarter 2026 results showing record revenue, underscoring a trend seen across a growing number of large tech companies: stronger sales, fewer workers.
The internet security and performance company reported revenue of $639.8 million, up 34% from a year earlier and the highest quarterly total in its history. At the same time, it posted a net loss of $62.0 million, wider than the $53.2 million loss in the same quarter last year.
Cloudflare co-founder and CEO Matthew Prince said on the company’s earnings call that the layoffs marked the first mass reduction in the company’s 16-year history. CFO Thomas Seifert said the cuts would affect employees across teams and geographies, with the exception of sales staff who carry revenue quotas.
Prince said the layoffs were not about trimming expenses. In a blog post, he and co-founder and president Michelle Zatlyn wrote that the company is trying to define how a “world-class, high-growth company operates and creates value in the agentic AI era.”
The company also reported more than $2.5 billion in remaining performance obligations, up 34% year over year, a sign of future revenue already under contract.
Cloudflare joins companies including Meta, Microsoft and Amazon in reporting both revenue growth and major workforce reductions as AI changes how work gets done. In Cloudflare’s case, management is explicitly linking the two, saying AI is making some jobs obsolete even as the business continues to expand.
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