Cloudflare says it will cut about 20% of its workforce, affecting more than 1,100 jobs globally, as it restructures operations around rapidly increasing use of AI tools. The company describes the changes as a redesign of teams, roles and internal workflows for an “agentic AI-first operating model,” rather than a short-term cost-cutting effort or a response to employee performance. CEO Matthew Prince and co-founder Michelle Zatlyn say Cloudflare’s use of AI has risen more than sixfold over the past three months, prompting the company to reimagine how functions operate. Multiple reports also link the announcement to an earnings-related reaction from investors: Cloudflare shares fall sharply (about 18% to 19% in after-hours or extended trading) after the layoffs and revenue outlook. The company forecasts second-quarter revenue of roughly $664 million to $665 million, slightly below some analyst expectations, and expects restructuring-related charges of about $140 million to $150 million in the second quarter. Earlier results reported by the company show first-quarter revenue and adjusted earnings ahead of estimates, despite the more cautious outlook.