Cloudflare cuts 20% of staff despite record revenue, reorganizes around AI

Cloudflare cut about 1,100 employees, or roughly 20% of its workforce, as it reorganized around the rise of AI tools.

The company said the layoffs were driven by role redesign and workflow changes from AI adoption, not by cost-cutting or performance issues.

This came even as Cloudflare posted a record Q1 revenue increase of 34% year over year, though net losses and margins worsened.

Cloudflare also said internal AI usage has surged 600% in the past three months, underscoring how quickly AI is reshaping operations and hiring.