Cloudflare cuts more than 1,100 jobs as it doubles down on an AI-first operating model.
๐ Cloudflare has announced plans to cut more than 1,100 jobs globally, equal to around 20% of its workforce, in a restructuring move directly tied to its strategy of placing AI at the center of corporate operations.
๐ค The company said this is not simply a cost-cutting move, but a shift toward an โagentic AI-firstโ model, where AI agents are used more deeply across engineering, HR, finance, and marketing. Internal AI usage has jumped more than 600% in just 3 months, showing that Cloudflare is trying to turn AI into an operating layer rather than just a support tool.
๐ What makes the move notable is that it came alongside fairly strong Q1 results. Revenue reached around $640 million, up 34% YoY and above expectations, while adjusted EPS also beat forecasts. This means the story is less about current business weakness and more about how the market prices future execution risk.
โ ๏ธ NET fell sharply by around 18โ19% in after-hours trading, reflecting investor caution over slightly softer Q2 guidance, $140โ150 million in restructuring costs, and the risk of talent loss during the transition.
๐ For the tech market, this is an important signal because AI is no longer being discussed only as a revenue growth driver. It is now directly reshaping staffing, workflows, and operating costs. Cloudflare may be moving early into a major trend, but near-term pressure could remain high until the company proves the real efficiency gains of its AI-first model.