Cloudflare announced plans to cut approximately 20% of its workforce, laying off over 1,100 employees globally as the company restructures around AI adoption. The San Francisco-based internet infrastructure and cybersecurity firm expects to incur charges between $140 million and $150 million in the second quarter related to the layoffs.

Despite beating first-quarter expectations with $639.8 million in revenue, Cloudflare forecast second-quarter revenue of $664-665 million, falling slightly short of analysts' $665.3 million estimate. Shares plummeted about 19% in extended trading. CEO Matthew Prince and co-founder Michelle Zatlyn described the restructuring as moving toward an agentic AI-first operating model, noting the company's own AI usage has surged over sixfold in recent months.

The job cuts reflect a redesign of internal processes and roles rather than a response to employee performance or short-term cost pressures. This follows a broader trend in tech—payments firm Block announced similar cuts in February, cutting over 4,000 jobs to embed AI across its operations.