Cloudflare Cuts Over 1,100 Jobs in Major AI-Led Restructuring

The company said that its internal use of AI has surged by more than 600 per cent over the last three months, with employees across engineering, finance, human resources and marketing increasingly relying on AI agents to carry out day-to-day tasks.

Cloudflare described the move as part of a broader organisational overhaul aimed at adapting to the 'agentic AI era', rather than a conventional cost-cutting exercise or a performance-driven layoff programme.

"This decision is not a reflection of the individual work or talent of those leaving us," the company said in the memo. "We are reimagining every internal process, team and role across the company."

The company further added that all employees would be informed directly about how the restructuring affects them, with notices being sent to both official and personal email addresses for impacted workers.

Cloudflare said the severance packages for departing employees would include full base pay through the end of 2026, continued healthcare support in the US through the end of the year and additional equity vesting benefits through August 15.

The company noted that employees who had not yet completed their one-year vesting cliff would receive prorated equity vesting as part of the separation package.

According to the memo, the company intends to complete the restructuring exercise in a single phase to avoid prolonged uncertainty and repeated rounds of layoffs.

Cloudflare said it was reshaping its organisational structure to remain competitive as AI rapidly transforms business workflows and operating models across the technology industry.

The company stated that its transformation strategy is aimed at making the organisation 'faster and more innovative' as it continues investing in AI-driven products and services.

- IANS