Cloudflare says AI made 1,100 jobs obsolete, even as revenue hit a record high
Cloudflare announced its first large-scale layoff. CEO Matthew Prince says because of AI efficiency gains, the company doesn't need as many support roles.
Cloudflare on Thursday joined a growing list of tech companies — including Meta, Microsoft, and Amazon — that have reported increased revenue alongside massive layoffs, attributing both trends to their use of AI.
Cloudflare, which provides internet security and performance services to millions of websites worldwide, announced it was cutting its workforce by approximately 20%, which equates to 1,100 people, it said as part of its first quarter 2026 earnings report on Thursday.
“We’ve never done something like this in Cloudflare’s history,” co-founder and CEO Matthew Prince said Thursday on the quarterly conference call, marking the first mass layoff in the company’s 16-year history. The company is cutting people from all teams and geographies except for salespeople who carry revenue quotas, CFO Thomas Seifert detailed on the call.
The news of the workforce cuts came as the company reported quarterly revenues of $639.8 million, a 34% year-over-year increase and the highest single quarter in the company’s history. However, this was coupled with a loss of $62.0 million compared with losing $53.2 million in the year-ago quarter.
That widening loss, even as revenue surged, highlights a familiar paradox in Cloudflare’s story: The company is growing fast but has yet to turn a consistent profit. But the loss was a smaller percentage of revenue, and the quarter was coupled with a lot of other positive indicators. For instance, Cloudflare reported that it had over $2.5 billion in “remaining performance obligations,” a year-over-year growth of 34%. RPO is the favorite metric these days to indicate revenue under contract but not yet delivered.
Hence, Prince insisted, the 20% cuts were not to reduce expenses but were strictly because of its use of AI.
“Today’s actions are not a cost-cutting exercise or an assessment of individuals’ performance; they are about Cloudflare defining how a world-class, high-growth company operates and creates value in the agentic AI era,” Prince and Cloudflare co-founder and president, Michelle Zatlyn, wrote in a related blog post about the layoffs.
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Prince acknowledged on the call that even though Cloudflare has been selling AI-powered products, it was at first cautious about adopting AI itself.
“Internally, the tipping point was last November. At that point, across our teams, we began to see massive productivity gains, team members that were two, 10, even 100 times more productive than they had been before. It was like going from a manual to an electric screwdriver,” he described.
“Cloudflare’s usage of AI has increased by more than 600% in the last three months alone,” he added.
Prince highlighted the internal use of AI coding, saying that virtually the entire R&D team is now using the company’s own Workers platform — a tool that lets developers build and run software directly on Cloudflare’s global network — including its vibe coding feature. He also noted that 100% of the code produced this way and deployed for use in Cloudflare’s products is “now reviewed by autonomous AI agents.”
But it’s not just developers who are using AI internally, he said. “Employees across the company from engineering to HR to finance to marketing run thousands of AI agent sessions each day to get their work done.”
As a result, these highly productive, AI-powered employees require fewer support staff, he argued.
“A lot of the support people that provide support behind them, those roles aren’t going to be the roles that, you know, drive companies going forward,” Prince said.
Interestingly, Prince says that Cloudflare “will continue to hire people, and we’ll continue to invest in them because the people that are embracing these tools are just so much more productive than we’d ever seen before. I would guess that in 2027 we’ll have more employees than we did at any point in 2026.”
Cloudflare said it ended its first quarter before layoffs with a headcount of about 5,500.
The pattern Prince described — deploying AI gains as justification for workforce reductions even during a period of strong revenue growth — is fast becoming a familiar script across the tech industry. Whether it reflects true structural transformation or acts as convenient cover for cost discipline is a question that investors and employees will be wrestling with for some time to come.
When asked by an analyst on the call why the company needed to cut so deeply after such a good quarter, Prince said, “Just because you’re fit doesn’t mean you can’t get fitter.”
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Pontos-chave
- A demissão de 1.100 funcionários pela Cloudflare destaca a necessidade de requalificação da força de trabalho no Brasil.
- O aumento da receita da Cloudflare, apesar das perdas, levanta questões sobre a sustentabilidade de modelos de negócios baseados em IA.
- As demissões refletem uma reestruturação necessária, não um fracasso individual, o que pode influenciar outras empresas a repensarem suas estratégias.
Análise editorial
A demissão em massa anunciada pela Cloudflare, que resultou na eliminação de 1.100 empregos, é um sinal claro das mudanças profundas que a inteligência artificial (IA) está promovendo no setor de tecnologia. Para o mercado brasileiro, que ainda está em fase de amadurecimento em relação à adoção de IA, essa notícia serve como um alerta sobre a necessidade de adaptação e requalificação da força de trabalho. A eficiência trazida pela IA pode ser um motor de crescimento, mas também pode gerar um impacto significativo nas estruturas de emprego existentes.
Além disso, a Cloudflare, apesar de reportar um aumento expressivo em sua receita, ainda enfrenta desafios em relação à rentabilidade. Isso levanta questões sobre a sustentabilidade de modelos de negócios que dependem fortemente de inovações tecnológicas, como a IA, para impulsionar resultados financeiros. O Brasil, com seu ecossistema de startups em expansão, deve observar de perto como as empresas locais podem equilibrar crescimento e rentabilidade em um cenário onde a tecnologia avança rapidamente.
O que se destaca nesta situação é a mensagem de que as demissões não são um reflexo de desempenho individual, mas sim uma reestruturação necessária para se alinhar com as novas realidades do mercado. Isso pode incentivar outras empresas a reconsiderar suas estratégias de negócios e a forma como utilizam a IA. O futuro do trabalho em tecnologia no Brasil pode ser moldado por essa transição, onde a habilidade de se adaptar às novas ferramentas e processos se tornará essencial para a sobrevivência e o sucesso.
Por fim, é importante que o setor educacional e as instituições de formação profissional no Brasil se preparem para essa nova demanda. A necessidade de habilidades em IA e tecnologia será cada vez mais premente, e o país deve investir em programas que capacitem os trabalhadores a se adaptarem a um ambiente de trabalho em constante evolução, onde a IA desempenha um papel central.
O que esta cobertura entrega
- Atribuicao clara de fonte com link para a publicacao original.
- Enquadramento editorial sobre relevancia, impacto e proximos desdobramentos.
- Revisao de legibilidade, contexto e duplicacao antes da publicacao.
Fonte original:
TechCrunch AISobre este artigo
Este artigo foi curado e publicado pelo AIDaily como parte da nossa cobertura editorial sobre desenvolvimentos em inteligência artificial. O conteúdo é baseado na fonte original citada abaixo, enriquecido com contexto e análise editorial. Ferramentas automatizadas podem auxiliar tradução e estruturação inicial, mas a decisão de publicar, a revisão factual e o enquadramento de contexto seguem responsabilidade editorial.
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