Cloudflare announces 1,100+ layoffs tied to agentic AI operational shift

Cloudflare, the cloud infrastructure and security firm, announced May 7, 2026 it will reduce its global workforce by more than 1,100 employees, a restructuring directly tied to the company’s rapid adoption of agentic AI tools across all internal operations.

Internal AI usage at Cloudflare has increased by more than 600% in the last three months alone, with staff across engineering, HR, finance, and marketing running thousands of AI agent sessions each day to complete work. Founders Matthew Prince and Michelle Zatlyn state the layoffs are not a performance assessment or cost-cutting exercise, but a deliberate reimagining of every team, role, and internal process to align with the demands of the agentic AI era.

Prince and Zatlyn sent a direct email to all global employees Wednesday afternoon, a practice Prince has maintained for every offer letter extended during his time leading the company. The email, titled "Building for the future," confirms every employee will receive a personalized notice from the founders within one hour of the email’s distribution. Departing employees will receive notices to both their Cloudflare work addresses and personal email accounts to ensure immediate delivery.

“Today is a hard day. This decision unfortunately means saying goodbye to teammates who have contributed meaningfully to our mission and to building Cloudflare into one of the world’s most successful companies,” the founders wrote. They emphasized the move is not a reflection of individual talent or work quality, but a necessary step to position the company as a high-growth leader in the agentic AI era.

The founders noted that smaller, repeated cuts spread over multiple quarters would create prolonged emotional uncertainty for staff and stall Cloudflare’s ability to build new products. Taking decisive action now provides clarity to both departing and remaining employees, and the company does not plan to conduct further large-scale layoffs in the foreseeable future.

Departing employees will receive severance packages that lead the industry, per the company’s commitment to reciprocal treatment of staff. Packages include full base pay through the end of 2026, continued healthcare coverage for U.S.-based employees through the end of 2025, and equity vesting through August 15, 2026. For employees who have not yet hit their one-year equity cliffs, those requirements will be waived, with pro-rated equity awards vesting through August 2026.

Cloudflare launched as a cloud-native company, allowing it to outpace legacy competitors that were slowed by decades-old systems and processes. Now a market leader in cloud security, content delivery, and Zero Trust solutions, the company says it can no longer rely on workflows and organizational structures that worked in earlier stages of growth. The reshaped organization, per the founders, will be faster and more innovative as it continues to pursue its mission to build a better Internet.

Cloudflare will hold its earnings conference call at 2 PM PT Wednesday, where additional details about the restructuring and Q1 2026 results will be shared. An all-hands meeting for remaining staff will also address the changes live. The company has posted open roles for candidates interested in joining its restructured teams, and its free consumer app to speed up and secure Internet connections is available at 1.1.1.1.

The company’s connectivity cloud protects entire corporate networks, helps customers build Internet-scale applications, accelerates websites and web apps, mitigates DDoS attacks, blocks malicious hackers, and supports Zero Trust adoption. Details about its full product suite are available at Cloudflare's main site, and investor materials are posted to its investor relations portal.

Cloudflare’s move reflects a growing trend among tech firms to restructure workforces as generative and agentic AI tools reduce the need for certain roles while creating demand for others. Unlike many tech layoffs in recent years that were framed as cost-cutting measures amid slowing growth, Cloudflare’s restructuring is explicitly tied to operational changes driven by AI adoption, with the company reporting strong growth and no need to cut costs. This distinction sets it apart from peers that have used AI as a post-hoc justification for layoffs, rather than a core driver of organizational design.