S.F.’s Cloudflare to cut 1,100 jobs in AI shift
San Francisco Chronicle • • business
Key Points:
- Cloudflare announced plans to lay off more than 1,100 employees globally as it restructures to focus on artificial intelligence, despite reporting a 34% increase in first-quarter revenue to $639.8 million.
- The company highlighted a 600% increase in AI usage over the past three months, with employees across various departments running thousands of AI agent sessions daily, prompting a reorganization to better align with the AI era.
- The layoffs, representing about 20% of Cloudflare's workforce of 5,156 employees, are described as a strategic shift rather than a cost-cutting measure or reflection of individual performance.
- Affected employees will receive base pay through the end of 2026, and U.S. workers will continue to receive healthcare support through the end of the year.
- Cloudflare anticipates incurring $140 million to $150 million in restructuring charges, primarily for severance and benefits, with most costs expected in the second quarter and the process largely completed by the end of the third quarter.
