Cloudflare says AI made 1,100 jobs obsolete as revenue hit a record

In short: Cloudflare says it is cutting about 1,100 jobs because employees using AI can do more work, even as the company reported record quarterly revenue.

What happened

Cloudflare, a company that helps websites stay secure and load faster, said it will cut roughly 20% of its workforce. That equals about 1,100 people, based on the company’s first quarter 2026 earnings report.

CEO Matthew Prince said this is the first large-scale layoff in Cloudflare’s 16-year history. The company said cuts will affect teams across different regions, with an exception for sales roles tied directly to revenue targets.

The layoff news came alongside strong top-line growth. Cloudflare reported quarterly revenue of $639.8 million, up 34% from the same time a year earlier, and its highest quarter ever. The company also reported a net loss of $62.0 million for the quarter.

Prince said the changes were driven by internal AI use. He compared the productivity jump to “going from a manual to an electric screwdriver.” He also said Cloudflare’s internal AI usage rose by more than 600% over the last three months, and that many teams run thousands of “AI agent” sessions each day (an AI agent is like a software helper that can carry out multi-step tasks).

Why it matters

This is another example of a company saying AI is reducing the need for certain office and support roles, even when the business is growing. For workers and job seekers, it is a sign that some tasks may be consolidated into fewer jobs as companies adopt AI tools more widely.

Source: TechCrunch AI