Cloudflare says AI made 1,100 jobs obsolete, even as revenue hit a record high

Cloudflare on Thursday joined a growing list of tech companies — including Meta, Microsoft, and Google — that have reported increased revenue alongside and massive layoffs, attributing both trends to their use of AI. Cloudflare, which provides internet security and performance services to millions of websites worldwide, announced it was cutting its workforce by approximately 20%, which equates to 1,100 people, it said as part of its first quarter 2026 earnings report on Thursday. “We’ve never done something like this in Cloudflare’s history,” co-founder and CEO Matthew Prince said Thursday on the quarterly conference call, marking the first mass layoff in the company’s 16-year history. The company is cutting people from all teams and geographies except for salespeople who carry revenue quotas, CFO Thomas Seifert detailed on the call. The news of the workforce cuts came as the company reported quarterly revenues of $639.8 million, a 34% year-over-year increase and the highest single quarter in the company’s history. However, this was coupled with a loss of $62.0 million compared with losing $53.2 million in the year-ago quarter. That widening loss, even as revenue surged, highlights a familiar paradox in Cloudflare’s story: the company is growing fast but has yet to turn a consistent profit. But the loss was a smaller percentage of revenue, and the quarter was coupled with a lot of other positive indicators. …