Cloudflare to Lay Off Over 1,100 Employees: Running Thousands of Agents Daily, Rebuilding Company for the AI Era

According to Dongcha Beating monitoring, Cloudflare has announced a global layoff of over 1,100 employees (about 20% of its workforce) as the company's internal way of working has fundamentally changed to restructure for the "Agentic AI Era."

Over the past three months, Cloudflare's internal AI usage has surged by over 600%. Employees across departments, from engineering and HR to finance and marketing, are required to run thousands of AI agent sessions daily to accomplish their tasks. The two founders emphasized in a company-wide memo that this layoff is not merely a cost-cutting measure or about eliminating underperformers but rather a complete redesign of every internal process and role.

The compensation package is quite generous: departing employees will receive their full base pay for the entire year of 2026, US employees will have health insurance coverage until the end of the year, and everyone's equity vesting period is extended until August 15th (employees with less than a year of tenure will be exempt from the one-year cliff). The founders have pledged that this is a "one-time" action and there will be no multiple rounds of sporadic layoffs to avoid causing sustained emotional strain on the remaining team.