Tech
May 08, 2026
Cloudflare Cuts 20% Workforce as AI Boosts Productivity
Cloudflare is cutting 20% of its workforce, or 1,100 jobs, citing AI-driven productivity gains. The…
The Layoff Announcement
Cloudflare on Thursday announced it was cutting its workforce by approximately 20%, which equates to 1,100 people, as part of its first quarter 2026 earnings report. This marks the first mass layoff in the company’s 16-year history.
The Impact of AI on Productivity
Cloudflare's usage of AI has increased by more than 600% in the last three months alone.
Internally, the tipping point for AI adoption was last November, when teams began to see massive productivity gains.
Employees across the company from engineering to HR to finance to marketing run thousands of AI agent sessions each day to get their work done.
The Financial Performance
Cloudflare reported quarterly revenues of $639.8 million, a 34% year-over-year increase and the highest single quarter in the company’s history.
The company had over $2.5 billion in “remaining performance obligations,” a year-over-year growth of 34%.
The Future Outlook
Cloudflare co-founder and CEO Matthew Prince said that the company will continue to hire people and invest in them because those embracing AI tools are much more productive. He predicts that in 2027, Cloudflare will have more employees than it did at any point in 2026.
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