Cloudflare to cut about 20% workforce

This is awkward.

Exhibit A - September 2025 - "Help build the future" - Cloudflare hires 1111 interns to "help build the future" [https://blog.cloudflare.com/cloudflare-1111-intern-program/]

Exhibit B - May 2026 - "Building for the future" - Cloudflare lays off 1100 people, about 20% of their workforce to "continue building the future" [https://blog.cloudflare.com/building-for-the-future/]

I'll finish on this quote: "The future ain't what it used to be." — Yogi Berra

> The packages for departing employees will include the equivalent of their full base pay through the end of 2026. Healthcare coverage is different across the globe, and if you’re in the United States, we’ll continue to provide support through the end of the year. We are also vesting equity for departing team members through August 15th, so they receive stock beyond their departure date. And, if departing team members haven’t hit their one-year cliffs, we are going to waive those and vest their pro-rated equity through August as well.

The announcement reads as pretty heartless to me, but this is a very, very nice departure package

"We are our own most demanding customer. Cloudflare’s usage of AI has increased by more than 600% in the last three months alone. Employees across the company from engineering to HR to finance to marketing run thousands of AI agent sessions each day to get their work done. 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."

As an English enthusiast, I'm getting very frustrated at how the language is consistently abused in executive communications to write words without saying anything.

The implication that is NOT said is that suddenly 20% of people were sitting around without any work to do because AI was making everyone so efficient and productive. This does not, however, seem to be the reality, based on conversations within the company. It appears we have yet another case of economic downturn disguised as increasing velocity.

Welp, looks like I’m affected. If anyone is looking to hire a systems engineer with distributed systems and load balancing experience, shoot me an email at <anything>@piperswe.me :/

I’ll update this with a resume link tonight…

I'm going to start calling these "Canary" moments.

Assuming we take everything at face value for these sorts of cuts, it creates the following scenario:

A company finds itself with surplus labor capacity due to the efficiencies in AI while also posting substantial profit or revenue growth. The company could downsize the workforce to capitalize on short-term efficiencies and increase margins, though this will come at the cost of long-term reputational harm due to posted profits/health as well as burning out staff who must do the same (or increasingly, more) work with less headcount, leading to attrition when the market shifts in their favor. Alternatively, it could leverage this surplus labor for a period of moonshot R&D or paying down technical/process debts while they have the capacity and the profit to pay for it, which harms short-term share price relative to their competitors slashing jobs, while improving the company's capabilities in the marketplace in the long-run, potentially through mastery of these AI tools or the creation of new product lines.

The fact so many orgs opt for immediate greed over long-term growth really is its own canary that leadership and governance both has failed the marshmallow test.

This really sucks. I loved this job. I'm an EM and I was trying to hire more people because we're so busy with everything we needed to do. My teams products are something like 95% profit.

Really going to miss my team, they were wonderful to work with. Secretly hoping they'll have to rehire.

I refuse to believe it was about AI. Coming from the inside, the bottleneck was never code. Seeing who is being laid off, especially on my team, it's the people who make things run.

> Cloudflare expects second-quarter revenue of $664 million to $665 million,

obviously $2.5e9ish/yr is substantial in absolute terms ... but that's it? They intermediate half the internet and only capture $7m/day?

There was an recent article on X with an interesting take - it could be that companies are doing layoffs not because AI is making them more productive but because it hasn't. Their costs have gone up paying for expensive AI but haven't seen any revenue benefits to offset it.

Article https://x.com/championswimmer/status/2051807284691612099

I know it's probably automatic because of the similar titles, but hitting the bottom of the layoff announcement only to be recommended that article about hiring 1,111 interns in 2026 is a reaaal bad look

Isn't the most likely explanation here that they needed to show in their earnings call how their bet on becoming AI infrastructure is leading to high revenue growth expectations, and that isn't happening (yet)?

The stock is currently at -17% in after hours trading.

So you need to do something that's good for your margins to show investors.

If you were impacted Magnetic (AI Tax Prep for CPA firms) is hiring senior - staff level engineers in SF https://www.ycombinator.com/companies/magnetic

I interviewed at cloudflare in ~2020 and didn’t get the job - everyone I met during the process seemed really smart and kind though. Would love to work with some of those people

Email me subject “cloudflare” if interested - thomas@ our domain (I am the cofounder)

"We are reorganizing for the agentic AI era" reads better than "our gross margin is compressing, our SBC is too high, and our growth is decelerating." Both descriptions could be true; only one gets you a flattering blog post.

The AI argument doesn't make sense to me for layoffs. If AI is making the company more productive then there's an incredible opportunity to use the existing workforce to tackle the massive backlog of important work. A big layoff only makes sense if there is no more useful work to do or you're killing products.

It's such a bad time to be laid off right now. The competition is ridiculous. I have to compete with like 100k world class employees. Best wishes cloudflare former employees. I hope some of you make new companies and hire other geeks who are on their butts. A lot of us at other companies got the boot with no severance or early stock vestings. It could be worse!

> The way we work at Cloudflare has fundamentally changed. We don’t just build and sell AI tools and platforms.

Anyone else stumbled over that part? That is not at all how I perceive CF.

My read of this:

Their AI costs have increased 600% but this hasn't translated into actual revenue. Also they are probably projecting AI costs to keep growing. They've done the math and at some point it is going to affect their bottom line.

Reducing or limiting AI usage would be inconceivable given Cloudflare itself has invested on AI and is selling AI services. Instead they've opted for reducing about 20% of their head count.

I dislike the title because it doesn't clearly state it's a layoff. "Building for the future" gave me the impression that it's about some major new initiative with a roadmap outlining plans.

It looks like they are using the "agentic AI era" as an excuse to restructure in order to boost margins. GAAP gross margin dropped ~5 points YoY (76% -> 71%)

Yikes, this sucks.

It is ironic that Cloudflare is letting go 1100 of employees, while roughly 6-7 months ago, they were aiming to hire 1111 interns.

Article: https://blog.cloudflare.com/cloudflare-1111-intern-program/

People who lived through 2001 and 2008 crashes, did it look like this or was it even worse than what's happening these days with so many layoffs?

"We are our own most demanding customer. Cloudflare’s usage of AI has increased by more than 600% in the last three months alone. Employees across the company from engineering to HR to finance to marketing run thousands of AI agent sessions each day to get their work done. 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." As an English enthusiast, I'm getting very frustrated at how the language is consistently abused in executive communications to write words without saying anything.

The implication that is NOT said is that suddenly 20% of people were sitting around without any work to do because AI was making everyone so efficient and productive. This does not, however, seem to be the reality, based on conversations within the company. It appears we have yet another case of economic downturn disguised as increasing velocity.

Executive: "Give me a title for the blog post where I'm laying off a bunch of people".

AI: "Building for the Future".

Executive: "Thank you! I knew it was the right decision".

Building for the future is great!

Except for one small, very tiny, itsy-bitsy problem. We humans are very bad at understand the second and third order effects of events. Really, really bad. First order consequences: "Oh we don't need people anymore".

Do I know the second order effects? Probably not. But at least I know they will be there.

Letting go 1,100 people into a bleak job market. Absolutely awful.

It wouldn't shock me if people formerly in tech have changed careers entirely, seemingly every tech-focused company is laying people off in favour of AI.

Makes sense to do these things. To realistically make it through this paradigm shift you need to organize into a thing that can exploit it. That inevitably requires eliminating teams that don't fit into the new picture. The severance package seems quite generous. Hope everyone lands on their feet.

It's not that individuals are not useful, or even that their roles are not useful. It's that you have to structure your organization to be able to exploit a coming wave, and existing mechanisms and operations just get in the way. By the time Netflix shut down the DVD business it was making $80 m in revenue and the margins on that business were some 50%. But if you think the writing is on the wall, you're forced to act.

Doesn't mean the people in the DVD-mail-ops sides were bad at what they do. The world had just changed and the business became different.

Clearly if AI were the productivity booster that we're told it is, you'd see hiring into it, not firing. Though I guess on the call Prince did say he expect end '27 to have more employees than for any of '26. Anyway.

Bill and Upwork also have announced layoffs today.

https://www.upwork.com/press/releases/upwork-ceo-hayden-brow...

https://www.bill.com/blog/a-message-to-bill-employees-may-20...

Cutting salaries to pay the AI costs for the remaining engineers. Going to be rough as this trickles through the entire economy over the next 10 years.

I'm sure this is going to happen a lot to big companies, with AI they are all going to find they have too much staff and are not likely to benefit from a higher pace of development. Smaller/Mid size companies on the other hand are likely limited in how much staff they can take on and AI just accelerates their plans (I'm in a company like this).

My response to this, as a generally satisfied CloudFlare customer who was excited to try out agentic email, is that it's not a good time to increase the amount of business I do with them.

Why are they laying off anyone when you got 500 million plus in pure profit. The tax system needs to be reworked to not incentivize layoffs. Major taxes should happen to support the well fair system in order to support people laid off. This is a stupid system we live in.

With the hiring 1111 interns thing, I think these companies (amazon as well) need to realize this is doing anything but inspiring confidence in those interns. Instead of being excited about going there, more of them would opt to go elsewhere instead of returning full time, or if they do return full time they'd be in fear of being let go next.

All the AI stuff is just noise to make it sound better - the real issue is the economic downturn.

If anything, AI makes each employee much more valuable because they can be much more productive and most big companies always have stuff that needs doing and opportunities for growth. So it's a sort of Jevons Paradox[1] situation but where human labour is the resource.

It's interesting to me that this is lower on the HN page than the Cloudflare post talking about the CVE handling even though the scoring is higher.

EDIT: Now it's off the main page, because of course it is.

I find it surprising that the word "incident" doesn't yet show up on this page. Cloudflare had at least two nasty incidents a few months ago. It certainly shook my confidence in the company's ability to run its infrastructure.

Obviously AI is just a excuse

Prince is claiming they laid off very few SWEs, I know at least an entire team of SWEs.

https://x.com/eastdakota/status/2052560831909433554?s=20

When you announce 639m USD revenue for q1 Then lay off a thousand people because you love the smell of your ai farts.

Worst part about the ai era is that so many are convinced they can and need to be on top of it to the extent of losing their core competency while mass producing trash

It’s good stuff but there’s room for a lot of things

Any other engineers just living life frozen at this point. I am unable to make any life decisions because it seems like I won't have a career in the near future. I am unable to purchase a home to settle down for my family, because dad might not have a job next week. I know I am fortunate to have a job, many don't, but fuck if this career isn't the worse thing ever for my overall health and happiness.

I don't see how laying people off isn't inherently and always a "cost-cutting exercise." If they had an unlimited budget, they probably wouldn't be laying them off, right?

Maybe it's supposed to mean that it's not... something more specific?

Really sorry to see the news about the RIF. My thoughts are with everyone affected.

If you (or someone you know) were impacted and want to stay in the distributed systems or data plane space, we’re doing a lot of work at Kong ($2B valuation API & AI governance company) on high-performance proxies, control planes, and Rust, Golang, etc. (I used to work on Cloudflare's edge proxy project)

Happy to chat about the roles or just the tech stack in general if you want to geek out. Feel free to reach out: datong#konghq.com

TBH I'm surprised people don't see the obvious result of this collective madness:

1. Force every engineer to use agentic AI to the max.

2. Constant anxiety at work due to the threat of job loss and unreasonable expectations from management/business.

3. Engineers start yoloing everything using AI while wasting tokens.

4. Speed goes up in the short term, while quality and expertise degrade little by little, all while bleeding money due to AI usage.

5. One year down the line you have a company full of engineers that don't care and a bunch of slop-bloated, bug-ridden products that the customers don't want, and a massive bill.

That's 2 major layoffs this week (Coinbase being the other). Is there an underlying common reason for this? And is it indeed AI-driven productivity as both companies claim?

Sure, but at least agents can now buy domains!

> Matthew has personally sent out every offer letter we've extended. It is a practice he has always looked forward to because it represented our growth and the incredible talent joining our mission

Who gives a shit if you treat your staff like this?

I will add cloudflare to the list of companies that I’ll never work for. Shame, because it seemed like an interesting place

Oof. I guess cloudflare is also gonna have an uptime monitor like Claude now.

IDGI. How is a company that owns a bunch of infrastructure you almost have to use to put your service on the internet not more profitable such that they have to do layoffs?

first slowly, then all at once.

I've been slowly moving all of my stuff over to Cloudflare. This certainly does not inspire confidence to continue down that path.

Companies like cloudflare operate at a very critical spot as of today. They manage the end points where TLS terminates for most of the internet traffic which means that they have access to all the information flowing through them in clear. When a company is so much motivated by the profits then it would not be too far away when they start selling all this information. With this much centralized control, they can easily turn to abusers instead of being internet gatekeepers for profit. Firing so many people is bound to disrupt the operations, the only question is how much can they can hide/manage.

Some of this is probably from all the companies they've acquihired, rather than genuine AI improvements.

For example, you probably don't need the extra finance person from the start-up you brought on.

Wow, can't say I saw this one coming. Cloudflare has been putting out a lot of strong work lately. What percentage of their workforce is this?

Screw Cloudflare. I went through a bizarre 3+ months hiring process where I would have a disconnected, vague 30 minute interview with someone every couple weeks. Then, suddenly rejected for no real reason given.

They want to polish upcoming employees into getting more used to AI tools usage but they don't want keep burning cash on experienced ones. They have to establish more YOY growth. Looks like everybody has to justify in the market why they need AI agents more than employees.

The day I switched to cloudflare for my domains... one of the best days in my life.

Why does "the future" in corporate announcements always mean layoffs?

The message to every Cloudflare employee is clear: you'll be there for the company when times are hard. But the company will not be there for you when times are hard.

It does not matter if the way we work has changed, or AI adoption has increased, or aliens show up. This is a demonstrated lack of loyalty that would result in immediate termination of the situation were reversed.

The important take away for everyone else is do you trust Matthew Prince to always take the high road and do what is right, combined with the fact that they man-in-the-middle all of your websites encrypted traffic? What happens when revenues are down and the shareholders demand blood again?

Surprised that this isn't part of a "journey"…

Thats a solid package tbh

Can the disgruntled ex-employees contribute to the Puppeteer Stealth plugin? ;)

Getting laid off in this job market is absolutely terrifying.

Hope everyone affected land on their feet.

Discussion thread on /r/Cloudflare: https://www.reddit.com/r/CloudFlare/s/47qJtr2yEx

Interestingly NET is down 15%-ish in extended hours trading and was even down 20% at some point. Many times a stock will make a positive move when layoffs are announced.

Cloudflare is a growing company by most metrics so if efficiencies through AI were the reason for the layoffs they'd just take the boost and grow even faster.

It all doesn't check out and I think the real reason for the layoffs and the negative sentiment by the market on the news is that their revenue growth was not as fast as their expenses and they realized they overhired. Leadership doesn't want to dive too much into the red even if it would mean bigger growth down the line. They are now beholden to the near and mid term stock performance.

I've had the chance to talk to some SWEs working at Cloudflare off the record in recent months and the one concensus I heard was that there was many times some tension between the boots on the ground and the decisions from senior managment but of course nothing they could do and especially after this they'll make sure to be quiet should they remain. There seemed to be a lot of pressure to deliver features and new products but quality has been left behind which means the SWEs felt pressure to deliver while also having to deal with the ensuing issues to resolve.

> Cloudflare’s usage of AI has increased by more than 600% in the last three months alone.

So did your outages...

titling "Building for the Future" the announcement of a mass lay-off is disgusting and makes me sick to be honest

is this really the future we want to build?

My 100% completely personal opinion.

It is not that AI is the contributing factor.

Cloudflare is transforming into yet another surveillance company.

I always see this "Cloudflare ensures you are not a bot" soon may change to "Cloudflare ensures you have a digital ID"

They will not need so many people for this and there will not exist competition to bring better products when people are fired massively and are crippled by financial problems.

AI for me is an excuse. Not the main issue.

It is a strategic transformation to ensure dominant position by killing off competition. Afterall employees are always viewed as threat.

well at least they're getting some decent severance, still sucks, especially in this market.

you can earn and spent but you'll never get enough here too i live in msk, russia and working full time job and yes,married have children

They should have fired 11 people more and match their public DNS resolver 1.1.1.1

They make it quite clear that these layoffs are in response to adapting to using AI at the company:

> The way we work at Cloudflare has fundamentally changed. We don’t just build and sell AI tools and platforms. We are our own most demanding customer. Cloudflare’s usage of AI has increased by more than 600% in the last three months alone. Employees across the company from engineering to HR to finance to marketing run thousands of AI agent sessions each day to get their work done. 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 rest is hand-wringing about the emotional weight of the decision and what employees can expect from the process.

What remains to be seen is whether relying so heavily on AI will have similar outcomes to what we've seen from Microsoft and others. Which is to say, is now the time to stop using Cloudflare?

"AI will not replace you, it will just supercharge your existing capabilities."

"lol jk it will totally replace you, bye"

What the hell!? Cloudflare is absolutely killing it and now they're laying people off! I know some good people there with deep expertise and I hope they're not affected.

I would think cloudflare would benefit from all the vibe-coded apps as it is an easy target to deploy these on.

Shameless title.

I’m finding this a little difficult to square. If things are radically changing within the company and they’re rearchitecting how the company works, wouldn’t they start with a transition period? Letting 1k people go, many of whom will be important parts of the organization, while simultaneously making radical changes in light of a radical rate of change over the last few months, seems very high risk.

Taking everything at face value, does anyone have thoughts on why this change makes sense now vs. in 6 months? Are they ripping the bandaid off or… due to the size of the org?

I suspect that companies anticipate that AI prices are going to go way, way up, and they're going all-in on the current "cheap" credits before then.

Did they find the vibecoding secret sauce?

I interviewed there over a month ago and they ghosted me after 3 good rounds. I dodged a bullet it seems.

Saving Cost for the Future.

Is the job market bad?

They also reported Q1 revenue up 34% YoY. https://www.techmeme.com/260507/p43 https://www.bloomberg.com/news/articles/2026-05-07/cloudflar...

Why is Matthew Prince not fired? They missed EPS and AI could write (or perhaps did write) this entirely meaningless announcement.

What they'll do instead is double down and start another 100 useless AI initiatives that no one wants.

A message devoid of any meaning. Like wtf does agentic era prep mean? Is their AI spend too high? Are they not profitable?

Also just once, I wish one of these CEOs would give themselves a slap on the wrist and take a pay cut

Cloudflare's stock price has been disconnected from reality for a while.. the only one that's wilder is Palantir which at least has revenue growth numbers that are very impressive.. meanwhile Cloudflare's enterprise value vs next 12 months revenue and revenue growth just don't justify this completely out of whack market valuation. I feel bad that the company has to try and sustainably justify that. It's incredible to watch the velocity of their launches. But I suppose the reality is most of them are just not selling

Didn’t they just recently say they were hiring a huge number of interns because of AI?

I'm not sure why they think I have the time to read all of that.

The hollowing out of another iconic American brand begins.

> Cloudflare’s usage of AI has increased by more than 600% in the last three months alone.

It seems only costs increased. If productivity had increased along with the AI costs they wouldn't need to layoff.

Of couse, this is all bullshit. Making a vague gesture at AI makes it sound like the layoffs are positive.

Truth is this is simply cost cutting. Either due to overhiring in the past, or bracing for the likely economic downturn.

Cloudflare has achieved "AGI" internally.

> 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.

What a load of crap..

"I have decided to sacrifice some of you for shareholder value, but that is something I am willing to do"

disappointing

hey now i am from msk,russia and i work as an aenginner, married

Anything to not affect your bottomline, Matthew Prince.

Major scumbag. Get fucked.

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20% of the workforce is currently being utilised for testing purposes by various companies. (just like we deploy Canary to 10% traffic for test)

In reality, approximately 5-10% of the workforce is equipped with AI technology and can now autonomously manage the entire company.

I am pretty sure CEOs can already see it! Companies create a great deal about the revenue per employee.

Downvoting my statement will not alter the situation, Claude and GPT-5.5 have the potential to replace most system administrators, DevOps engineers, copywriters, support personnel, and other roles.

I have observed this phenomenon in private product companies in India, where I serve as a consultant to multiple companies. I have noticed that 5-10% of the workforce is sufficient to ensure the continued performance of products, with reduced communication overhead, faster updates, and improved reliability.

I also have several side projects that encompass a wide range of responsibilities, so I am not merely a passive executive role.

In India, it has become increasingly challenging to secure jobs in the DevOps, system administration, and frontend domains.

In my opinion, a backend engineer’s job is the most difficult to replace at present, particularly if that engineer possesses a deep understanding of market and product dynamics.