Cloudflare CEO Matthew Prince announced on May 7 that the company will be cutting more than 1,100 jobs globally as part of a major restructuring driven by the rapid adoption of artificial intelligence (AI).
In a detailed email sent to employees, Prince explained that Cloudflare has “fundamentally changed” over the past few months as AI tools become deeply integrated into daily operations. He noted that the company is not only building and selling AI technologies but also actively using them internally at scale.
According to him, Cloudflare’s AI usage has surged by over 600% in just three months, with employees across departments—including engineering, HR, finance, and marketing—using thousands of AI agent sessions daily to complete their work. This shift, he said, has forced the company to rethink how it is structured in the “agentic AI era” to improve efficiency and better serve its mission of building a better internet.
Prince clarified that the layoffs are not related to employee performance or cost-cutting measures, but rather a complete reorganization of internal processes, teams, and roles to align with the company’s AI-driven future. He acknowledged the difficulty of the decision and expressed gratitude to the employees who are leaving, emphasizing their contributions to Cloudflare’s growth and success.
To support departing staff, the company has introduced a severance package that includes continued base pay through the end of 2026, extended healthcare support in the US until year-end, and equity vesting until August 15. Cloudflare also waived vesting cliffs for employees who had not completed one year, ensuring prorated benefits.
Prince said the company is opting for a single large restructuring rather than repeated layoffs to avoid prolonged uncertainty and disruption. He emphasized that acting decisively now will provide clarity for departing employees and stability for those who remain.
He further stated that Cloudflare, originally built as a cloud-native company, must evolve its structure to stay ahead in a rapidly changing technological landscape. According to him, embracing AI is essential for maintaining innovation and speed.
Concluding his message, Prince thanked outgoing employees for their contributions and expressed confidence that they would go on to build successful careers elsewhere. He also reaffirmed Cloudflare’s mission to improve the internet, calling the changes difficult but necessary for the company’s future.
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