Cloudflare Lays Off 1100, Cites 600% Surge in Internal AI Use

May 8, 2026 11:31 PM IST | Written by Neelam Sharma | Edited by Vaibhav Jha

Cloudflare, a U.S. based cloud infrastructure and cybersecurity company, announced laying off 1100 people, more than 20% of their staff strength on Thursday, owing to increased Artificial Intelligence (AI) adoption as claimed by the company’s co-founders.

According to a blogpost by Cloudflare co-founders Matthew Prince and Michelle Zatlyn, the decision was taken after the company’s usage of AI increased by more than 600% in the last three months.

“We are our own most demanding customer. Employees across the company from engineering to HR to finance to marketing run thousands of AI agent sessions each day to get their work done. That means, we have to be intentional in how we architect our company for the agentic AI era in order to supercharge the value we deliver to our customers,” read an email addressed to the 1100 laid-off employees of Cloudflare.

The company also announced a severance package for laid-off employees as full base pay for the remaining 7 months of 2026.

Founded in 2009, Cloudflare Inc provides a range of internet services including content delivery network (CDN), DDoS mitigation and domain registration. It went public at New York Stock Exchange in 2019.

“We’ve asked the team to do this only once, as hard as that may be today. We don’t want to do it again for the foreseeable future. By taking decisive action now, we provide immediate clarity to those departing and protect the stability of the team that remains. We are making these changes now because making smaller, repeated cuts or dragging a reorganization out over multiple quarters creates prolonged emotional uncertainty for employees and stalls our ability to build. It’s the right thing to do; it’s the honest thing to do; and it reflects the values of the company we are continuing to build,” read the email.

The Numbers Behind the Cuts: $2.17 Billion in Revenue, 10% Headcount Growth

According to the latest 10-K filing by Cloudflare for fiscal year ended December 31, 2025, it reported 51,56 full time employees with 2452 located outside the U.S.

The headcount went from 3,682 (end of 2023) to 4,263 (end of 2024) to 5,156 (end of 2025).

The cloud infrastructure company reported total revenue of $2.17 billion for fiscal year 2025, with a 29.8% revenue growth from 2024 to 2025. Despite the strong revenue growth, Cloudflare posted a net loss of $102.3 million in 2025, compared to net losses of $78.8 million in 2024 and $183.9 million in 2023.

Cloudflare SEC 10-K Filings revenue for 2025

Year-over-year comparison:

2025: $2,167.9 million
2024: $1,669.6 million
2023: $1,296.7 million

In 2025, Cloudflare also reported an increase of $110.8 million in general and administrative expenses and an increase of $91.1 million in research and development expenses, owing largely due to “increased employee-related costs due to a 10% increase in headcount”. The company also recorded an increase of $5.4 million in third-party technology services cost.

“My Puppies Will Miss Me”: The Layoff Post That Humanized Cloudflare’s AI Job Cuts

When Cloudflare announced it was cutting more than 1,100 jobs globally this week, the headlines focused on artificial intelligence, automation and the future of work. But online, the moment people connected with most had nothing to do with technology. It was about puppies.

Cayetano Antolino, a Cloudflare employee affected by the layoffs, shared a quiet, emotional post on LinkedIn after getting informed by the company. Antolino wrote that the hardest part about leaving was knowing the next role might not be remote — something that would deeply affect his dogs, who had become used to midday walks, couch breaks and appearing in the background of meetings.

That small detail suddenly captured the emotional side of a much bigger shift happening across the tech industry.

Cloudflare says the layoffs are part of a major restructuring around artificial intelligence. The cybersecurity and internet infrastructure company revealed that its internal use of AI has surged by more than 600 per cent in just three months, with employees across engineering, HR, finance and marketing now using thousands of AI agent sessions daily.

Also Read: 80K Tech Jobs Cut in Q1 2026; Nearly Half Due to AI: New Report

Authors

Neelam Sharma

Neelam Sharma is a passionate storyteller, and journalist with over a decade of experience across leading Indian media houses.
Known for her calm presence on screen and powerful storytelling off it, Neelam brings a rare blend of credibility, creativity, and empathy to journalism. Her strength lies in ground reporting and research-driven narratives that connect with the heart of the audience. Whether covering social issues, human-interest features, or breaking news, she combines factual depth with a human touch—making every story not just informative.

Vaibhav Jha

Vaibhav Jha is an Editor and Co-founder of AI FrontPage. In his decade long career in journalism, Vaibhav has reported for publications including The Indian Express, Hindustan Times, and The New York Times, covering the intersection of technology, policy, and society. Outside work, he’s usually trying to persuade people to watch Anurag Kashyap films.