Cloudflare has joined the growing list of organizations implementing workforce reductions as companies restructure around the rapid adoption of AI tools.
In a blog post on Thursday, May 7, 2026, the global cloud infrastructure and cybersecurity company announced plans to cut more than 1,100 jobs globally.
Cloudflare Executives Detail Layoffs As AI Use Soars Across Organization
In the blog post, Cloudflare CEO Matthew Prince and co-founder Michelle Zatlyn said the company is restructuring teams and workflows to align with what they called the “agentic AI era.”
“Today is a hard day,” they wrote. “This decision unfortunately means saying goodbye to teammates who have contributed meaningfully to our mission and to building Cloudflare into one of the world’s most successful companies.”
Cloudflare had 5,156 full-time employees at the end of 2025 and expects to incur charges of $140 million to $150 million related to the layoffs during the second quarter, Reuters reports. These layoffs represent a 20% reduction in workforce, notes the outlet.
Prince and Zatlyn emphasized via the blog post that the layoffs stem from operational changes rather than employee performance or short-term financial pressures.
“We want to be clear that this decision is not a reflection of the individual work or talent of those leaving us. Instead, we are reimagining every internal process, team, and role across the company,” they shared. “Today’s actions are not a cost-cutting exercise or an assessment of individuals’ performance; they are about Cloudflare defining how a world-class, high-growth company operates and creates value in the agentic AI era.”
Cloudflare said its internal use of AI tools has increased more than 600% over the past three months, with employees across departments — including engineering, HR, finance, and marketing — running thousands of AI agent sessions each day to complete tasks.
“It’s important to us that we treat departing team members right and in a way that exceeds what we’ve seen from other companies,” Prince and Zatlyn wrote. “We believe acting with empathy isn’t about avoiding hard decisions but rather about how you treat people when those decisions are made.”
Cloudflare Offers Severance For Laid-Off Employees
Cloudflare shared that affected employees will receive severance packages that include full base pay through the end of 2026. Departing team members based in the United States will continue receiving healthcare coverage through the end of the year.
Laid-off employees will also keep vesting equity through Aug. 15, which lets them receive additional stock after their departure date. Workers who haven’t yet hit their one-year vesting cliff will have that requirement waived and will instead receive prorated equity through August, per the blog post.
The company said it chose to make broad cuts now rather than implement smaller, recurring layoffs over multiple quarters, arguing the move would provide immediate clarity for departing employees while helping preserve stability for remaining teams.
Growing Concerns About AI And Job Losses
The layoffs at Cloudflare come as concerns continue to grow over the potential for AI to reshape industries and reduce jobs. As AFROTECH™ previously reported, AI had a significant impact on the job market in 2025, contributing to over 48,000 layoffs in the U.S. across companies, including Microsoft, Amazon, and HP.
For Cloudflare, the company says its mission of building a better internet is more important than ever, adding that significant work remains.
“To those departing us: you’ve helped build the strong foundation Cloudflare stands on today,” Prince and Zatlyn wrote in the blog post. “We have the utmost respect for your work and gratitude for the impact you have made. We’re confident you will land at other great places and build many future great companies, bringing with you a unique set of skills learned while building Cloudflare.”
