Cloudflare Inc. announced Thursday that it will fire more than 1,100 employees as it shifts toward an agentic AI-first operating model [1].
The move signals a growing trend of technology firms replacing human roles with artificial intelligence to increase productivity, even during periods of financial growth.
The company is cutting about 20% of its global workforce [1]. Cloudflare said the reductions are necessary to accelerate its transition to a new operating model, citing AI-driven productivity gains that have made certain roles obsolete [1, 3].
These layoffs come despite strong financial performance. Cloudflare reported first-quarter revenue of $640 million [2], though some reports place the figure at $639.8 million [4]. This represents record revenue for the firm.
Internal data suggests a rapid adoption of these technologies. AI usage within the company rose 600% over a three-month period [2]. This surge in automation is a primary driver behind the decision to reduce headcount.
Market reaction to the announcement was negative. Cloudflare stock prices declined 24% following the news [2].
The company did not specify which departments would be most affected by the cuts, only that the impact is global [1].
“Cloudflare will fire more than 1,100 employees”
Cloudflare's decision to implement massive layoffs while reporting record revenue suggests a strategic pivot where AI is viewed not just as a tool for efficiency, but as a direct replacement for human labor. The 24% drop in stock price indicates that investors may be wary of the instability caused by such a rapid organizational overhaul or the perceived risk of over-reliance on agentic AI models.
