Cloudflare, a US-based internet infrastructure and cybersecurity firm, will cut about 20% of its workforce as it restructures operations around the growing use of artificial intelligence (AI). 

According to a report by Reuters, the company said it plans to lay off more than 1,100 employees globally. Cloudflare had 5,156 full-time employees at the end of 2025. It expects to incur charges between $140 million and $150 million related to the job cuts in the second quarter. 

The San Francisco-headquartered company also forecast second-quarter revenue of $664 million to $665 million, slightly below analysts’ estimate of $665.3 million, as per LSEG data cited by Reuters.  

In a message to employees, Chief Executive Officer Matthew Prince and co-founder Michelle Zatlyn said the company is reorganising teams to operate in what they described as an “agentic AI-first” model. The shift reflects a broader move to integrate AI tools across functions. 

The company clarified that the layoffs are part of a redesign of internal processes and roles, and not due to employee performance or short-term cost pressures. 

Cloudflare also said that its internal use of AI tools has increased more than sixfold in the past three months, leading to significant changes in how teams work. 

Broader trend of AI-led layoffs 

Cloudflare’s move comes amid a wider wave of job cuts across the technology sector as companies accelerate AI adoption to improve efficiency and reduce costs. In recent weeks, firms such as Freshworks announced plans to cut about 11% of its workforce while crypto exchange Coinbase said it would lay off around 700 employees as it shifts towards becoming an “AI-native” company. 

Payments major PayPal has also outlined plans to reduce its workforce over the next few years to free up resources for technology and AI investments. 

The trend is not limited to smaller firms. Large technology companies, including Microsoft and Meta, have announced workforce reductions or buyouts as they ramp up spending on AI infrastructure and automation. 

Industry data shows the scale of the shift. More than 90,000 tech jobs have already been cut globally in 2026, with AI and automation cited as a key factor in many cases. In the first quarter alone, nearly 80,000 layoffs were recorded, with about half linked directly to AI-driven changes.