Cloudflare AI Layoffs Hit 1,100 Jobs After Q1 Earnings Beat; Stock Slides
Cloudflare is laying off over 1,100 employees—about a fifth of its staff—while overhauling its business to focus on artificial intelligence. The company beat expectations for first-quarter earnings, yet its stock tumbled nearly 19% in after-hours trading. The reason? Cloudflare’s revenue guidance for the second quarter missed the mark, coming in just shy of analysts’ estimates. Timing is key here. Cloudflare isn’t only marketing AI—they’re leaning into it internally. CEO Matthew Prince and President Michelle Zatlyn pointed out a spike: internal AI use shot up over 600% in just three months. Employees are running thousands of AI agent sessions daily. This “agentic AI” software handles multi-step work, often with minimal human direction.