Cloudflare reduces workforce by 20% citing shifts in agentic AI, triggering an 18% drop in its stock price.
Cloudflare Inc. (NET) saw its shares fall 18% after announcing plans to cut 1,100 jobs, representing 20% of its workforce. The company attributed the layoffs to fundamental changes driven by agentic artificial intelligence, which it says alters operational needs.
The move follows a period of rapid hiring, with Cloudflare’s headcount nearly doubling over the past two years. Analysts had anticipated cost adjustments but not reductions of this scale. The company did not provide forward guidance but indicated AI adoption would reshape its business model.
Shares declined sharply in after-hours trading, reflecting investor concerns over restructuring costs and long-term growth implications.