Cloudflare Inc. (NYSE:NET) reported a strong first-quarter revenue beat but simultaneously announced it will cut roughly 20% of its global workforce as the web infrastructure giant fundamentally restructures its operations around artificial intelligence (AI).
‘Agentic AI-First’ Future
Despite posting a 34% year-over-year revenue increase to $639.8 million, Cloudflare is shedding over 1,100 jobs. The company stressed that the move is not a defensive measure against macroeconomic headwinds, but rather a strategic pivot to an “agentic AI-first” operating model.
CEO Matthew Prince explained that massive internal productivity gains from AI technologies prompted the reorganization. Cloudflare’s internal use of AI tools surged 600% in just the last three months, with 97% of its engineers now actively utilizing AI coding assistants.
Not A ‘Cost-Cutting’ Exercise
“This is not a cost-cutting exercise or an assessment of the individuals’ performance,” Prince stated during the earnings call. “It is about defining how a world-class, high-growth company operates and creates value in the agentic AI era.”
Management noted that the efficiency of autonomous AI agents has fundamentally changed the nature of support roles within the …
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