Cloudflare Inc. (NYSE:NET) reported a strong first-quarter revenue beat but simultaneously announced it will cut roughly 20% of its global workforce as the web infrastructure giant fundamentally restructures its operations around artificial intelligence (AI).

‘Agentic AI-First’ Future

Despite posting a 34% year-over-year revenue increase to $639.8 million, Cloudflare is shedding over 1,100 jobs. The company stressed that the move is not a defensive measure against macroeconomic headwinds, but rather a strategic pivot to an “agentic AI-first” operating model.

CEO Matthew Prince explained that massive internal productivity gains from AI technologies prompted the reorganization. Cloudflare's internal use of AI tools surged 600% in just the last three months, with 97% of its engineers now actively utilizing AI coding assistants.

Not A ‘Cost-Cutting’ Exercise

“This is not a cost-cutting exercise or an assessment of the individuals' performance,” Prince stated during the earnings call. “It is about defining how a world-class, high-growth company operates and creates value in the agentic AI era.”

Management noted that the efficiency of autonomous AI agents has fundamentally changed the nature of support roles within the ...