Overview
- Cloudflare, which disclosed the overhaul Thursday, will eliminate more than 1,100 roles worldwide, or about one-fifth of its workforce.
- Leaders framed the shift as an “agentic AI-first” model, meaning software agents that can act on their own now handle many tasks, with internal AI use up more than 600% in three months and thousands of agent sessions running daily.
- The company expects $140 million to $150 million in restructuring charges mostly in Q2, will exclude quota-carrying sales from cuts, aims to finish by the end of Q3, and is offering base pay through 2026 plus extended benefits to departing staff.
- First-quarter revenue rose 34% to $639.8 million with adjusted earnings of $0.25 per share, but Q2 revenue guidance of $664 million to $665 million came in slightly below expectations.
- Shares fell roughly 15% to more than 20% in after-hours and Friday trading as investors reacted to the softer near-term outlook and the scale and timing of the restructuring.