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Cloudflare to cut 20% of jobs after weak Q2 outlook
On May 7, US-based cloud services firm Cloudflare said it will cut about 20% of its global workforce, affecting more than 1,100 employees.
The layoffs came after the company forecast second-quarter revenue below Wall Street estimates.
The company expects revenue of US$664 million to US$665 million for the quarter, versus analysts’ average estimate of US$665.3 million, according to LSEG data.
The layoffs reflect a shift to an AI-driven operating model, CEO Matthew Prince and CFO Michelle Zatlyn said in a statement, and Cloudflare shares fell more than 13% in extended trading.
🔗 Source: Reuters
🧠 Food for thought
Implications, context, and why it matters.
Cloudflare’s restructuring comes during fast growth
- Cloudflare cut jobs even as first-quarter 2026 revenue rose 34% from a year earlier to US$639.8 million 1.
- The company was also bringing in cash, with US$84.1 million in free cash flow, equal to 13% of revenue, in the same quarter 2.
- The latest layoffs came after smaller reductions. In January 2024, Cloudflare said it fired 60 employees for performance reasons, which it said matched prior quarters 3.
AI plans add pressure to a growing company
- Cloudflare’s decision fits a wider pattern where companies use an “AI-first” plan to support broad layoffs while still posting growth and adjusted profit 2.
- That path could be hard to carry out because Cloudflare plans to cut about 20% of its staff while the business is still expanding quickly 1.
- The company also faces image risk. Its firing process drew attention after a termination video spread online, and “We don’t always get it right,” wrote Matthew Prince, CEO of Cloudflare 4.
Recent Cloudflare developments
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