Cloudflare announced on Thursday that it would lay off around 20% of its global workforce as part of a major restructuring initiative centered on what the company described as an “agentic AI-first operating model.”
The move will affect more than 1,100 employees across multiple departments worldwide, marking one of the company’s largest workforce reductions to date.
In a statement to employees, Chief Executive Officer Matthew Prince and co-founder Michelle Zatlyn said the layoffs reflected a fundamental transformation in how the company operates in the age of artificial intelligence.
“The way we work at Cloudflare has fundamentally changed,” the executives said. “We don’t just build and sell AI tools and platforms. We are our own most demanding customer.”
According to the company, Cloudflare’s internal use of AI has increased by more than 600% over the past three months alone. Employees are now reportedly running thousands of AI agent sessions daily across functions including engineering, human resources, finance and marketing.
“That means we have to be intentional in how we architect our company for the agentic AI era,” the statement added.
Cloudflare said the layoffs were tied to a redesign of workflows, operational structures and team functions rather than employee performance or short-term financial pressure.
The company had 5,156 full-time employees at the end of last year. It now expects to incur restructuring charges of between $140 million and $150 million during the second quarter as a result of the workforce reduction.
The announcement came amid a broader wave of AI-driven restructuring across the technology sector. Less than a day earlier, Freshworks announced plans to cut around 11% of its workforce, while Coinbase revealed plans to eliminate approximately 700 jobs.
Both companies cited rapid advances in artificial intelligence and changing operational requirements as major factors behind the cuts.
Industry analysts say the latest developments highlight how AI adoption is beginning to reshape workforce strategies across the global technology industry. Companies are increasingly integrating AI agents and automation tools into daily operations, reducing dependence on traditional staffing structures for repetitive and administrative tasks.
Cloudflare executives said the company was now “reimagining every team and function” around AI-assisted operations as it prepares for what it sees as the next phase of the technology industry’s evolution.
Source: Reuters/FE
Bd-pratidin English/ Jisan
