Yet another tech company has laid off a large number of employees — and mentioned AI as one of the possible reasons for the move.
Cloudflare, the web infrastructure and security giant, announced it is cutting more than 1,100 employees globally. In a note to staff, co-founders Matthew Prince and Michelle Zatlyn framed the decision not as a cost-cutting move, but as a fundamental reimagining of how the company operates in what they called the “agentic AI era.”
AI At The Core Of The Decision
The timing of the announcement is hard to separate from Cloudflare’s own aggressive AI adoption. The company says its internal usage of AI has surged by more than 600% in just the last three months. Employees across every function — engineering, HR, finance, marketing — are running thousands of AI agent sessions daily to get work done. That kind of internal transformation almost inevitably raises questions about headcount.
Cloudflare is far from alone. Tech layoffs have become a familiar rhythm, with companies routinely citing restructuring and efficiency as justifications even as profits climb. What makes Cloudflare’s announcement notable is the directness with which leadership connects the cuts to AI-driven process changes — not performance, not market conditions.
How The Cuts Were Communicated
The founders took an unusually personal approach. Matthew Prince sent individual offer letters to every employee being let go — a practice he had previously reserved only for new hires. Every member of the global team received a direct email from both founders clarifying their status, rather than having managers deliver the news in a piecemeal fashion.
“Rather than trickling out notices through managers, we will be sending emails to every employee,” the note read — a nod to the growing importance of transparency in corporate culture, particularly during difficult moments.
The Bigger Picture
Cloudflare started as a cloud-native company, and that gave it an early edge over incumbents slowed by legacy systems. Now, leadership argues, it must make a similar leap — shedding the organizational structures that worked in a pre-AI world and rebuilding for one defined by autonomous agents and AI-assisted workflows.
CEOs across industries are increasingly turning to AI tools to drive decisions and strategy, and Cloudflare’s move signals that even companies at the frontier of internet infrastructure aren’t immune to that pressure turning inward. When a company’s own AI usage jumps 600% in a quarter, it’s only a matter of time before the org chart gets scrutinized alongside everything else.
The company is scheduled to discuss the layoffs further at its earnings conference call and a subsequent all-hands meeting. For the 1,100+ employees departing, the message from the top was clear: this isn’t about your performance. It’s about what comes next — for better or worse.