Cloudflare says AI made 1,100 jobs obsolete, even as revenue hit a record high
TechCrunch • • business
Key Points:
- Cloudflare announced a 20% workforce reduction, cutting approximately 1,100 jobs, marking the first mass layoff in its 16-year history, while reporting a 34% year-over-year revenue increase to $639.8 million in Q1 2026.
- The company attributes the layoffs not to cost-cutting but to productivity gains driven by AI, with internal AI usage increasing over 600% in three months and AI tools significantly boosting employee output.
- Cloudflare's CEO emphasized that AI adoption has transformed workflows across departments, reducing the need for support roles, though the company plans to continue hiring and expects a larger workforce in 2027.
- Despite strong revenue growth, Cloudflare reported a widening quarterly loss of $62 million, highlighting ongoing challenges in achieving consistent profitability amid rapid expansion.
- The company's approach reflects a broader tech industry trend of leveraging AI-driven productivity gains to justify layoffs during periods of revenue growth, raising questions about the long-term impact on workforce dynamics.
