US-based cloud infrastructure company Cloudflare is reportedly preparing to lay off around 20% of its global workforce, impacting more than 1,100 employees, as it restructures operations around artificial intelligence.
According to multiple reports, the company is moving toward an “AI-first” operating structure, where a growing share of internal workflows and operational processes will be handled through AI agents and automation tools.
The move comes despite Cloudflare reporting strong financial performance in the first quarter of 2026. The company recently posted quarterly revenue of nearly $640 million, surpassing market expectations. However, management believes rapid advances in AI are fundamentally reshaping how technology companies operate internally.
CEO Matthew Prince reportedly stated that the use of AI tools within the company has increased sharply in recent months, reducing the need for certain support and operational roles.
Cloudflare is expected to incur nearly $150 million in restructuring charges related to the layoffs. At the same time, the company is likely to continue selective hiring in engineering and AI-focused functions, reflecting a broader talent shift across the tech industry.
The development underscores a growing trend among global technology firms increasingly aligning workforce restructuring with AI adoption. Over recent months, several companies have reduced headcount or slowed hiring while redirecting investments toward automation, generative AI, and productivity-focused tools.
Cloudflare operates one of the world’s largest cloud networks, providing cybersecurity, internet infrastructure, and content delivery services to businesses globally. The company has become a key player in enabling secure and high-performance internet operations for enterprises and digital platforms.
The layoffs also highlight how AI is beginning to reshape not only products and services, but also the internal economics and workforce structures of technology companies worldwide.
Build smarter. Learn faster. Grow stronger with StartupByDoc.