Cloudflare cuts 1,100 jobs, says AI made roles obsolete despite record revenue

The internet security giant revealed the decision Thursday alongside record-breaking quarterly revenue, underscoring the growing impact of AI on the global tech workforce.

Cloudflare co-founder and CEO Matthew Prince described the move as unprecedented in the company’s 16-year history. Speaking during the earnings call, Prince insisted the layoffs were not driven by financial struggles or employee performance but by the rapid shift toward AI-powered operations.

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“We’ve never done something like this in Cloudflare’s history,” Prince said. CFO Thomas Seifert added that the restructuring affects workers globally as the company adapts to what executives called the “agentic AI era.”

In a statement accompanying the layoffs, Prince and Cloudflare president Michelle Zatlyn said the company was redesigning how it operates in an AI-driven world. “Today’s actions are not a cost-cutting exercise,” they said. “They are about Cloudflare defining how a world-class, high-growth company creates value in the agentic AI era.”

Despite posting a wider quarterly loss of $62 million compared with $53.2 million a year earlier, Cloudflare pointed to strong future demand, revealing it now holds more than $2.5 billion in remaining performance obligations — contracted revenue yet to be delivered. The announcement places Cloudflare alongside tech giants such as Meta, Microsoft, and Amazon, which have increasingly linked workforce reductions to AI adoption.