Cloudflare is planning to lay off 1,100 workers as the firm increases its reliance on AI tech internally.

The job cuts total to around 20% of the company’s workforce, with CEO Matthew Prince and COO Michelle Zatlyn saying that the way Cloudflare works “has fundamentally changed” in a blog post explaining the cuts.

In recent months, the use of AI at Cloudflare has skyrocketed 600%, the pair said in the blog post. This surge in AI use has caused the firm to reevaluate “how we architect our company for the agentic AI era.”

“By taking decisive action now, we provide immediate clarity to those departing and protect the stability of the team that remains,” the pair said.

“We are making these changes now because making smaller, repeated cuts or dragging a reorganization out over multiple quarters creates prolonged emotional uncertainty for employees and stalls our ability to build.”

They called the mass cuts “the right thing to do; it’s the honest thing to do;  and it reflects the values of the company we are continuing to build.”

Workers affected by the cuts will receive their full salary until the end of 2026, the company said, expecting the cuts to cost about $150 million.

The firm said that these cuts were not a reflection of an individual’s work or talent in their field, nor was it a “cost-cutting exercise”.

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Instead, “they are about Cloudflare defining how a world-class, high-growth company operates and creates value in the agentic AI era,” Prince and Zatlyn wrote.

Cloudflare has had a strong start to 2026, not just according to CEO Prince; the firm recorded a revenue of $639.8 million in the first quarter of the a year, a 34% year-on-year increase. Prince largely credited AI for these gains.

“AI is driving a fundamental re-platforming of the internet and a paradigm shift in how software is created and consumed,” Prince said. “It’s shaping up to be the biggest tailwind we’ve ever seen in Cloudflare’s history.”