Because of AI: Cloudflare wants to lay off 20 percent of its workforce

More than 100,000 people in the tech industry have already lost their jobs this year. This emerges from an analysis of the Layoffs.fyi database. In addition to companies like Oracle, Intel and Amazon, Cloudflare has now also announced that it will cut 1,100 jobs, as Techcrunch reports. The reason that attracts particular attention is that the company attributes the job cuts directly to the increasing use of AI.

AI-related layoffs are increasing measurably

According to the consulting firm Challenger, Gray & Christmas, the proportion of AI-related layoffs has recently risen sharply. In an earlier evaluation based on data from November 2025, the proportion was still less than one percent. A quarter of all layoffs are now said to be due to AI. Now Cloudflare, which offers security and performance solutions for websites, also announced in its annual report for the first quarter of 2026 that it wanted to reduce its workforce by around 20 percent.

“We have never done anything like this in the history of Cloudflare,” co-founder and CEO Matthew Prince said on the call. A blog post about the layoffs said: “Today’s actions are not a cost-cutting exercise or an assessment of individual performance. They are about Cloudflare defining how a world-class, high-growth company operates and creates value in the age of agent-based AI.” The move comes despite record sales: In the first quarter of 2026, the company generated $639.8 million – an increase of 34 percent compared to the previous year. At the same time, however, the loss increased from 53.2 to 62 million dollars.

AI tools are used company-wide

Prince explained in the conference call that Cloudflare was initially hesitant to introduce AI tools. That has changed. “Internally, the turning point was last November. That’s when we saw massive productivity gains across all of our teams. Team members were two, ten, or even a hundred times more productive than before. It was like switching from a hand screwdriver to an electric screwdriver,” said the CEO. AI is used not only in software development, but also in other areas such as marketing, human resources and finance. In the last three months alone, the use of corresponding tools has increased by more than 600 percent.

A study by the National Bureau of Economic Research earlier this year found that AI had no measurable impact on employment or productivity at nearly 90 percent of companies over the past three years. This share could now gradually shift. As Techcrunch reports, Meta, Microsoft and Amazon also attribute both layoffs and increases in sales to the use of AI. When asked by an analyst why Cloudflare was making such drastic cuts despite a record quarter, Prince replied: “Just because you’re fit doesn’t mean you can’t get fitter.”