3 min learnMight 9, 2026 05:11 PM IST
Cloudflare lately introduced one of many largest workforce cuts in its historical past, saying advances in synthetic intelligence have made round 1,100 jobs out of date at the same time as the corporate reported report quarterly income progress.
The web infrastructure and cybersecurity firm mentioned it’s decreasing its workforce by practically 20 per cent, affecting workers throughout a number of groups and areas. The layoffs come regardless of Cloudflare posting its highest-ever quarterly income of $639.8 million within the first quarter of 2026, marking a 34 per cent year-on-year improve.
Cloudflare CEO and co-founder Matthew Prince described the choice as half of a bigger shift towards AI-driven operations reasonably than a conventional cost-cutting train. Talking throughout the firm’s earnings name, Prince mentioned the corporate had seen dramatic productiveness enhancements after aggressively adopting AI instruments internally over the previous few months.
In accordance with Prince, Cloudflare workers are actually utilizing AI throughout engineering, human sources, finance, advertising, and different departments. The corporate says its use of AI has elevated by greater than 600 per cent within the final three months alone.
Prince claimed some workers turned “two, 10, even 100 instances extra productive” with AI help, evaluating the transition to shifting from a guide screwdriver to an electrical one.
One main focus has been software program improvement. Cloudflare mentioned practically its complete analysis and improvement division now makes use of AI-assisted coding instruments. The corporate additionally revealed that every one AI-generated code deployed into its merchandise is reviewed by autonomous AI brokers earlier than launch.
Because of this, the corporate believes fewer help roles are wanted round extremely productive AI-powered groups. Prince prompt that sure conventional help features could not play the identical position inside fashionable tech firms as AI turns into extra succesful.
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The layoffs mark the primary large-scale workforce discount in Cloudflare’s 16-year historical past. Chief Monetary Officer Thomas Seifert mentioned the cuts have an effect on practically each division besides gross sales groups tied on to income technology.
Regardless of the job cuts, Cloudflare insists it nonetheless plans to proceed hiring sooner or later. Prince mentioned workers who successfully use AI instruments have gotten considerably extra invaluable and productive, including that the corporate may finally develop its whole workforce once more by 2027.
The announcement displays a broader development throughout the tech business, the place firms together with Meta, Microsoft, and Amazon are more and more linking workforce reductions to AI adoption whereas persevering with to report sturdy revenues and main investments in synthetic intelligence infrastructure.
Cloudflare ended the quarter with round 5,500 workers earlier than the layoffs took impact.
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