Overview
- Cloudflare, which announced the plan Thursday alongside an earnings beat, will cut more than 1,100 jobs worldwide, about one fifth of its staff.
- Leaders said internal use of AI agents jumped over 600% in three months, prompting a rebuild of teams and workflows for an agentic AI model that uses software agents to handle routine tasks.
- Cuts span most departments and regions, with quota-carrying sales roles largely spared, and the company expects to substantially complete the overhaul by the end of the third quarter.
- Cloudflare projects $140 million to $150 million in restructuring charges mostly in the second quarter, and departing staff get base pay through the end of 2026, U.S. health coverage through year-end, and extended equity vesting.
- Shares fell roughly 18% to 24% after the news even though first-quarter revenue rose 34% to $639.8 million and guidance for the second quarter of $664 million to $665 million landed slightly below Wall Street expectations.