"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."
"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"
"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."
Cloudflare announced a workforce reduction of approximately 20%, affecting about 1,100 employees, as part of its first quarter 2026 earnings. The company reported quarterly revenue of $639.8 million, up 34% year over year and the highest quarter in its history, while recording a $62.0 million loss. The loss widened compared with the prior year, though it represented a smaller share of revenue. Cloudflare reported over $2.5 billion in remaining performance obligations, growing 34% year over year, indicating revenue under contract but not yet delivered. Leadership stated the layoffs were not a cost-cutting measure or a judgment of individual performance, but were tied to how AI changes the company’s operations and value creation.
Read at TechCrunch
Unable to calculate read time
Collection
[
|
...
]