Cloudflare is axing more than 1,100 employees in a worldwide bloodbath as the San Francisco tech giant dramatically restructures. Founders told staff that the company’s internal use of artificial intelligence has exploded more than 600% in just three months.
The internet security and cloud networking firm revealed the massive cuts Thursday alongside first-quarter revenue of $639.8 million, a 34% increase from a year earlier, reported The San Francisco Chronicle.
“The way we work at Cloudflare has fundamentally changed,” co-founders Matthew Prince and Michelle Zatlyn told employees in a savage internal memo.
“We don’t just build and sell AI tools and platforms. We are our own most demanding customer,” they wrote, adding that workers across engineering, HR, finance, and marketing 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,” the memo, obtained by Business Insider, stated.
Cloudflare insisted the layoffs were “not a cost-cutting exercise” or a reflection of employee performance, but rather part of a sweeping effort to “reimagine every internal process, team, and role across the company.”
The company, founded in 2009, had 5,156 full-time employees at the end of 2025, meaning the cuts amount to roughly one-fifth of its global workforce.
It’s unclear how many Bay Area employees would be affected.
Cloudflare’s founders said all employees would be notified directly by email within an hour, rather than through managers, calling the move a one-time, decisive reset designed to avoid “smaller, repeated cuts” that could drag out uncertainty.
“We’ve asked the team to do this only once.”
Departing workers are being offered unusually generous severance packages, including full base pay through the end of 2026, continued US health care coverage through year’s end, and equity vesting through Aug. 15 — even for some employees who had not yet reached standard vesting cliffs.
The company said it expects to take on $140 million to $150 million in restructuring-related charges, mostly tied to severance, benefits, and related costs, with most expenses landing in the second quarter.
Cloudflare said the restructuring should be substantially complete by the end of the third quarter as it pushes to reshape itself into a faster, AI-first company.
