Cloudflare said on Thursday it will cut about 20 percent of its global workforce as it restructures operations around the rapid adoption of artificial intelligence tools, while also forecasting second-quarter revenue slightly below Wall Street expectations, News.Az reports, citing Reuters.

The internet infrastructure and cybersecurity company plans to eliminate more than 1,100 jobs worldwide.

It had 5,156 full-time employees at the end of 2025 and expects restructuring charges of between $140 million and $150 million linked to the layoffs in the second quarter.

For the second quarter, Cloudflare projected revenue of $664 million to $665 million, slightly below analysts’ estimate of $665.3 million, according to LSEG-compiled data. The company expects adjusted earnings of 27 cents per share, which is in line with expectations.

Despite the restructuring announcement, shares of the San Francisco-based company fell around 19 percent in extended trading, even after it reported stronger-than-expected first-quarter results.

CEO Matthew Prince and co-founder Michelle Zatlyn said in a message to employees that Cloudflare is rethinking every team and function to operate in what they described as an “agentic AI” era.

The company said the job cuts are part of a redesign of internal processes and roles, rather than a response to employee performance or short-term cost pressures.

Cloudflare also said its internal use of AI has increased more than sixfold over the past three months, driving significant changes in how teams operate.

In the first quarter, the company reported revenue of $639.8 million, beating analysts’ estimate of $621.9 million. Adjusted earnings came in at 25 cents per share, above expectations of 23 cents per share.

Despite recent volatility, Cloudflare shares have risen 30.3 percent so far this year.

The announcement comes amid growing concern among investors and economists that AI-driven automation could disrupt industries and accelerate job losses in sectors most exposed to automation.

In a similar development, payments company Block announced in February that it would cut more than 4,000 jobs—nearly half its workforce—as part of a broader shift to integrate AI across its operations.

Earlier this year, Goldman Sachs economists estimated that AI was responsible for between 5,000 and 10,000 monthly net job losses in 2025 in the most exposed U.S. industries.

News.Az 

By Nijat Babayev