Cloudflare said on Thursday it would lay off about 20% of its workforce as part of a shift toward an “agentic AI-first operating model”. The layoffs will impact more than 1100 roles globally across multiple departments.
“We are writing to let you know directly that we’ve made the decision to reduce Cloudflare’s workforce by more than 1,100 employees globally. The way we work at Cloudflare has fundamentally changed. We don’t just build and sell AI tools and platforms. We are our own most demanding customer. Cloudflare’s usage of AI has increased by more than 600% in the last three months alone,” began a statement from Cloudflare CEO Matthew Prince and co-founder Michelle Zatlyn.
The company said its employees now ran “thousands of AI agent sessions each day to get their work done” — from engineering to HR to finance to marketing. Cloudflare said the changes made it necessary for the company
“That means we have to be intentional in how we architect our company for the agentic AI era,” the statement said.
Cloudflare, which had 5,156 full-time employees at the end of last year, expects charges between $140 million and $150 million associated with the job cuts in the second quarter.
The update came less than a day after Freshworks cut about 11% of its workforce and crypto exchange platform Coinbase announced plans to cut around 700 jobs. Both companies have linked the layoffs to AI advances and the growing impact of artificial intelligence in getting work done.
The era of ‘agentic AI’
Cloudflare CEO Matthew Prince and co-founder Michelle Zatlyn said in a message to employees that the company was reimagining every team and function to operate in what they described as an agentic AI era.Cloudflare said the job cuts reflect a redesign of internal processes and roles, rather than a response to employee performance or short-term cost pressures.The company added that its own use of AI has increased more than sixfold over the past three months, prompting major changes in how teams operate.