Cloudflare cuts 20% of its jobs due to AI, and its stock takes a 19% spill — 1,100 jobs disappearing as company increased usage of AI sixfold over past months

Cloudflare has announced a 20% reduction in its workforce, equating to 1,100 jobs, as the company has significantly increased its usage of AI technology. Despite meeting or surpassing revenue and EPS estimates for Q1 2026, the stock took a hit with a 19% drop in one day and nearly 24% for the week. The company attributes the job cuts to the need to adapt to the AI era and plans to incur a charge of $140-$150 million for the layoffs. Cloudflare's Q2 2026 revenue guidance fell slightly below expectations, leading to investor disappointment and speculation about the company's growth strategy.