Cloudflare Lays Off 1,100 Workers Despite Record Revenue, Blaming AI
TL;DR
- Cloudflare cut approximately 20% of its workforce, amounting to 1,100 jobs, in its first mass layoff.
- The announcement came alongside a record quarterly revenue of $639.8 million, marking a 34% year-over-year increase.
- CEO Matthew Prince stated the reductions were driven by artificial intelligence efficiency gains rather than cost-cutting.
- Support roles across various teams were affected, while revenue-carrying salespeople were spared.
Internet security and performance provider Cloudflare announced its first large-scale layoff in a 16-year history, eliminating about 20% of its staff. Co-founder and CEO Matthew Prince explained that internal productivity gains from artificial intelligence meant the company required fewer support positions.
The workforce reduction affects approximately 1,100 people across various teams and geographic locations. According to CFO Thomas Seifert, sales personnel carrying revenue quotas were excluded from the cuts.
The job cuts coincided with the release of the company's first-quarter earnings report, which revealed a record $639.8 million in quarterly revenue. Despite the 34% year-over-year revenue increase, Cloudflare reported a widening loss of $62.0 million.
Executives insisted the restructuring was not a cost-saving measure, but rather a strategic shift toward operating in the agentic AI era. Prince noted that internal AI usage surged significantly, leading to massive productivity increases and autonomous agents reviewing code.
Why It Matters
This event highlights a broader industry shift where major tech firms utilize artificial intelligence efficiency gains to justify large-scale workforce reductions, even while reporting record-breaking revenues.
May 8, 2026 · Updated 10/29/2026, 2:12:35 PM · Reported with: TechCrunch Layoffs
Sources (1)
NRI Bytes writes its own articles from the reporting below.
TechCrunch Layoffs — Cloudflare says AI made 1,100 jobs obsolete, even as revenue hit a record highUp next · Job Layoffs
ConocoPhillips to cut up to 25% of global workforce, affecting up to 3,250 jobs
Read next →
