Cloudflare Announces 20% Workforce Reduction Amid AI Restructuring

Cloudflare, a U.S. cybersecurity services company, has announced plans to lay off approximately 20% of its workforce, which equates to over 1,100 employees, according to Reuters. The company's CEO, Matthew Prince, stated that the restructuring is aimed at adapting to the era of AI tools, with a redesign of each team and function. According to PANews, Cloudflare has reported a more than sixfold increase in its AI usage over the past three months. The layoffs are part of an internal process and role redesign, rather than being driven by employee performance or short-term cost pressures. Cloudflare anticipates second-quarter revenue to be between $664 million and $665 million, slightly below analysts' expectations of $665.3 million. Despite exceeding expectations for first-quarter revenue and profit, the company's stock fell by approximately 19% in after-hours trading.