Cloudflare announced on May 7, 2026, that it is laying off more than 1,100 employees, representing about 10% of its workforce, as the cybersecurity company reorganizes for what it calls the 'agentic AI era.' The cuts were disclosed in a memo to staff on Thursday, hours after the company reported its first-quarter earnings.
The layoffs are part of a broader restructuring aimed at shifting resources toward artificial intelligence and automation. In the memo, CEO Matthew Prince said the company needs to 'move faster' and focus on AI-driven products, though specific details on the new strategy were not immediately provided.
Cloudflare reported Q1 2026 revenue of $430.6 million, up 29% year-over-year, but the company posted a net loss of $38.2 million for the quarter. The layoffs are expected to save approximately $150 million annually, according to company filings.
Affected employees will receive severance packages including 16 weeks of pay plus two weeks for each year of service, along with extended health benefits and career transition support. The company said it will also provide immigration support for affected workers on visas.
Cloudflare's stock fell 4% in after-hours trading following the announcement. The company joins a growing list of tech firms that have cut jobs in 2026 as they pivot toward AI, including Salesforce and Microsoft earlier this year.
