Cloudflare has announced a significant global workforce reduction, cutting over 1,100 jobs as it adapts to the evolving landscape dominated by artificial intelligence.
The San Francisco-based leader in internet security and cloud networking shared this major layoff news on Thursday, coinciding with a report of an impressive first-quarter revenue of $639.8 million, marking a 34 percent increase compared to the previous year.
In a candid internal communication, co-founders Matthew Prince and Michelle Zatlyn informed employees of the profound impact AI has had on the company’s operations.
“The way we work at Cloudflare has fundamentally changed,” they communicated to their team.
The executives highlighted a dramatic rise in the internal use of AI, noting a 600 percent increase in just three months, as various departments like engineering, HR, finance, and marketing increasingly turn to automated systems.
“We don’t just develop and market AI tools and platforms; we are also our own most demanding customer,” they expressed in their message.
According to the memo, employees now run ‘thousands of AI agent sessions each day.’
‘That means we have to be intentional in how we architect our company for the agentic AI era,’ stated the memo, obtained by Business Insider.
Cloudflare has unleashed a brutal worldwide jobs massacre – slashing more than 1,100 workers as the San Francisco tech titan races to reinvent itself for the age of artificial intelligence
In a stark internal memo, co-founders Matthew Prince and Michelle Zatlyn warned staff that AI had completely transformed how the company operates
Cloudflare insisted the savage cuts were ‘not a cost-cutting exercise’ and claimed they were not linked to employee performance. Instead, executives described the bloodbath as part of a dramatic overhaul to ‘reimagine every internal process, team, and role across the company.’
The company, founded in 2009, employed 5,156 full-time workers at the end of 2025 – meaning nearly one in five staff members will lose their jobs.
It remains unclear how many employees in the Bay Area will be impacted.
In another shock move, company chiefs said workers would learn their fate directly by email within an hour rather than through their managers. Executives described the cuts as a one-off purge intended to avoid ‘smaller, repeated cuts’ that could prolong uncertainty.
‘We’ve asked the team to do this only once.’
Those leaving the company are being offered eye-watering severance deals, including full base pay through the end of 2026, continued US healthcare coverage through the end of the year and equity vesting through August 15 – even for some staff who had not yet reached normal vesting milestones.
Cloudflare said it expects to rack up between $140 million and $150 million in restructuring costs, mostly tied to severance and employee benefits, with the bulk of the hit expected in the second quarter.
The company said the sweeping shake-up should be largely complete by the end of the third quarter as it pushes to transform itself into a leaner, faster, AI-first powerhouse.
The internet security and cloud networking giant revealed the layoffs on Thursday while also boasting first-quarter revenue of $639.8 million (pictured: San Francisco’s financial district)
Cloudflare insisted the savage cuts were ‘not a cost-cutting exercise’ and claimed they were not linked to employee performance (pictured: the Cloudflare HQ in San Francisco)
Prince – the richest resident of Utah – has been a controversial figure in his home state, after he build an 11,000-square-foot mansion in Park City.
Neighbors and city planners historically opposed the project for its height, size, and disruption of the historic district.
The mansion boasts three bedrooms, a pool, a 4,000-square-foot garage, and a separate 1,100-square-foot home office.
Beyond his mansion, Matthew Prince has been at the center of high-profile legal and corporate battles, ranging from neighborhood lawsuits over ‘menacing’ dogs to global debates on internet censorship at Cloudflare.
Earlier this week a different billionaire crypto boss told hundreds of workers they were being sacked in a blunt early morning email that warned artificial intelligence had changed work forever.
Brian Armstrong, co-founder of cryptocurrency exchange Coinbase, posted a copy of the message on social media at 6.55am on Tuesday morning.
Armstrong wrote that the company would cut 14 percent of its workforce, affecting roughly 700 people, blaming AI and the pressing need to change the company’s culture.
He said affected workers would receive more details by email within an hour, but Coinbase employees said their system access had already been restricted.
Brian Armstrong, CEO of Coinbase, told hundreds of workers they were being sacked in a blunt early morning email
Armstrong wrote that the company would cut 14 percent of Coinbase’s workforce, affecting roughly 700 people, blaming AI and the pressing need to change the company’s culture
‘I know this feels sudden and harsh,’ he wrote – adding that Coinbase had made the ‘difficult decision’ because of its ‘duty to protect customer information.’
Oracle, the software and cloud computing powerhouse founded by billionaire Larry Ellison, started cutting staff in April in what insiders described as a ‘significant reduction in force.’
Workers said they were informed via early morning emails before quickly losing access to company systems.
‘Today is your last working day,’ read one termination notice seen by Business Insider, which told staff their roles had been eliminated as part of a ‘broader organizational change.’
The $420billion company has declined to comment on the scale of the layoffs, though one employee told the BBC the cuts could reach around 10,000 roles.
