Cloudflare cuts 1,100 jobs in restructuring for ‘agentic AI era’

Cybersecurity and cloud services provider Cloudflare has laid off more than 1,100 employees globally as part of a sweeping restructuring linked to artificial intelligence, according to an internal memo sent to staff by its founders.

In the memo, shared publicly by the company on Thursday, Cloudflare said the layoffs were part of an effort to redesign its operations around the rapid adoption of artificial intelligence across teams and workflows.

“We’ve made the decision to reduce Cloudflare’s workforce by more than 1,100 employees globally,” the memo said, adding that the company’s internal usage of AI had surged more than 600% in the past three months.

The company said employees across departments, including engineering, human resources, finance and marketing, were increasingly relying on AI agents to complete tasks, prompting a rethink of organisational structures and processes.

“Today’s actions are not a cost-cutting exercise or an assessment of individuals’ performance; they are about Cloudflare defining how a world-class, high-growth company operates and creates value in the agentic AI era,” the founders said in the note.

Cloudflare co-founders Matthew Prince and Michelle Zatlyn said the move was intended to avoid prolonged uncertainty caused by multiple rounds of layoffs.

“We’ve asked the team to do this only once,” the memo said, adding that the company wanted to “provide immediate clarity” and protect the stability of the remaining workforce.

The company said affected employees would receive severance packages including full base pay through the end of 2026, continued healthcare support in the United States through the year-end, and extended equity vesting through August 15.

Cloudflare joins a growing list of technology firms restructuring operations amid rising investments in AI and efforts to streamline costs.

Cryptocurrency exchange operator Coinbase recently said it would cut about 14% of its workforce as it seeks to become “lean, fast, and AI-native”.

Chief Executive Brian Armstrong said in an internal email to employees on Tuesday that the company needed to adjust its cost structure amid a downturn in the cryptocurrency market.

“We’re currently in a down market and need to adjust our cost structure now so that we emerge from this period leaner, faster, and more efficient for our next phase of growth,” Armstrong wrote in the email, which he also posted on social media platform X.

Last month, Meta Platforms announced plans to cut 10% of its workforce, or about 8,000 jobs, while also shutting down around 6,000 open positions as the company continues to ramp up investments in AI technologies.