Cloudflare cutting 20% of staff as AI use skyrockets Company running 'thousands' of agents every single day. By Tom Williams on May 11 2026 02:45 PM Print article Cloudflare says AI could be 'the biggest tailwind' in the company's history. Image: Shutterstock Cloudflare will cut more than 1,100 employees or around 20 per cent of its global workforce as its use of artificial intelligence rapidly increases, the networking and cybersecurity giant announced on Friday, Australian time. CEO and cofounder Matthew Prince and COO and cofounder Michelle Zatlyn wrote in an email to workers that Cloudflare’s work “has fundamentally changed” in the era of generative AI. “Cloudflare’s usage of AI has increased by more than 600 per cent in the last three months alone,” they told staff. “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. “That means we have to be intentional in how we architect our company for the agentic AI era in order to supercharge the value we deliver to our customers and to honor our mission to help build a better internet for everyone, everywhere.” The email informed employees they would receive another email “within the next hour” that would clarify “how this change affects them”. Some of the departing employees had been at Cloudflare for less than a year, the company suggested in its email. Cloudflare did not comment when asked by Information Age whether any of its roughly 120 Australian staff would be affected, or how the layoffs would impact the company’s plans to hire more than 1,100 interns in 2026. Staffing numbers down, as revenue rises Departing staff would be offered severance packages including “the equivalent of their full base pay through the end of 2026”, Cloudflare said. Cloudflare estimated its planned cuts would cost between $US140 million ($194 million) and $US150 million ($208 million) due to severance payments and related costs, a regulatory filing showed. The company said its plan would be “substantially complete by the end of the third quarter of fiscal 2026”. Cloudflare is understood to have around 120 staff in Australia. Image: Shutterstock Cloudflare also reported its financial results for the first quarter of 2026 on Friday, citing a 34 per cent increase in revenue year-over-year. Prince told investors the company had “a very strong start to 2026” and suggested AI was “shaping up to be the biggest tailwind we’ve ever seen in Cloudflare’s history”. In their email to employees, Prince and Zatlyn said Cloudflare’s decision to cut a significant portion of its workforce was “not a reflection of the individual work or talent of those leaving us”, but was “about Cloudflare defining how a world-class, high-growth company operates and creates value in the agentic AI era”. “… We are making these changes now because making smaller, repeated cuts or dragging a reorganisation out over multiple quarters creates prolonged emotional uncertainty for employees and stalls our ability to build,” they said. Coinbase and other firms cite AI in layoffs America’s largest cryptocurrency exchange, Coinbase, announced on Tuesday (AEDT) that it would cut roughly 14 per cent of its workforce, or about 700 employees. The company cited AI and market volatility as reasons for the decision. In an email to all employees, CEO Brian Armstrong said the firm was “adjusting early and deliberately to rebuild Coinbase to be lean, fast, and AI-native". “Over the past year, I’ve watched engineers use AI to ship in days what used to take a team weeks,” he said. “Non-technical teams are now shipping production code and many of our workflows are being automated. “The pace of what's possible with a small, focused team has changed dramatically, and it's accelerating every day.” Coinbase reported a second consecutive quarterly loss on Friday, with revenue down 31 per cent in the first quarter of 2026 after a 20 per cent decline in the final quarter of 2025. Other technology companies which have cited AI during recent layoffs include the likes of Telstra International, Pinterest, Atlassian, Amazon, HP, Afterpay, and WiseTech. Tom Williams Tom Williams is a senior journalist at Information Age with key interests in consumer technology, artificial intelligence, quantum computing, cybersecurity, and telecommunications. He was previously a digital journalist at ABC News, where he covered technology and breaking news. You can follow Tom on Bluesky, LinkedIn, or Threads, contact him at [email protected], and send tip-offs via secure email to [email protected]. Tags: cloudflare ai artificial intelligence coinbase