Cloudflare has announced that more than 1,100 employees will be leaving the company as part of a global restructuring plan. The decision was shared with staff on 7 May, just hours after the cybersecurity firm reported first quarter earnings that beat Wall Street expectations but still triggered a sharp 14 per cent drop in its share price during after hours trading.
The global cloud network and technology company explained that the layoffs are not about cutting costs or employee performance. Instead, they are part of a broader reorganisation to prepare for what Cloudflare calls the “agentic AI era.” Internal use of AI has surged by over 600 per cent in the past three months, with teams across engineering, HR, finance, and marketing running thousands of AI agent sessions daily. Leaders said this shift has fundamentally changed how the company operates, requiring new structures and roles to move faster and deliver more value to customers.
Departing employees will receive what Cloudflare described as industry leading support packages. These include severance pay through the end of 2026, extended healthcare coverage, and vested equity benefits until mid August.
The announcement also carried a personal touch. Matthew Prince, CEO, Cloudfare, who has personally signed every offer letter in the company’s history, emphasised that the layoff message came directly from him and co founder Michelle Zatlyn rather than through managers.
For Cloudflare, this restructuring signals a deliberate shift toward leaner, AI driven operations, even as it continues to balance customer growth with internal transformation.