Microsoft · TechCrunch AI
Cloudflare confirms AI made 1,100 jobs obsolete, even as revenue hit a record high
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Cloudflare on Thursday joined a growing list of tech companies, including Meta, Microsoft, and Amazon, that have reported increased revenue alongside massive layoffs, attributing both trends to their use of AI.
Key facts
- For instance, Cloudflare reported that it had over $2.5 billion in “remaining performance obligations,” a year-over-year growth of 34%
- 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
- 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
- At that point, across their teams, they began to see massive productivity gains, team members that were two, 10, even 100 times more productive than they
Summary
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 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. 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.