Web performance and security company Cloudflare announced last week that it’s laying off more than 1,100 employees worldwide as part of an AI-driven restructuring plan.
In an email to workers, CEO Matthew Prince and President Michelle Zatlyn said the company’s AI usage has skyrocketed — by over 600% in the past three months alone — with AI agents being heavily used by employees in HR, marketing, finance, and engineering.
“That means we have to be intentional in how we architect our company for the agentic AI era in order to supercharge the value we deliver to our customers and to honor our mission to help build a better Internet for everyone, everywhere,” the Cloudflare co-founders said.
They also noted, “Today’s actions are not a cost-cutting exercise or an assessment of individuals’ performance; they are about Cloudflare defining how a world-class, high-growth company operates and creates value in the agentic AI era.”
Departing employees will receive severance equivalent to their full base salary through the end of 2026. The company noted that US workers will continue to receive healthcare coverage through December 31.
In addition, Cloudflare said it will accelerate equity vesting for affected staff through August 15, allowing them to continue accumulating shares after their departure. For employees who have not yet reached their one-year vesting cliff, the company will waive that requirement and provide pro-rated equity vesting through August.
“By taking decisive action now, we provide immediate clarity to those departing and protect the stability of the team that remains,” said Prince and Zatlyn. “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.”
Cloudflare topped revenue and earnings forecasts for the first quarter of 2026, yet its shares plunged more than 20% following the same-day announcement of workforce layoffs and softer near-term guidance.
According to data from Layoffs.fyi, cybersecurity companies that announced layoffs this year include Kaseya, Axonius, CyberArk, At-Bay, Pentera, and Arctic Wolf.
*the article has been updated to correct the title of Michelle Zatlyn from COO to President
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