CLOUDFLARE announced last week that it is laying off more than 1,100 employees worldwide as part of an AI-driven restructuring plan, with the news published by SecurityWeek on 11 May 2026. The company topped revenue and earnings forecasts for the first quarter of 2026, but its shares plunged more than 20% on the same day as the layoffs were disclosed.
Departing employees will receive severance equivalent to their full base salary through the end of 2026, US workers will keep healthcare coverage through 31 December, and equity vesting will be accelerated through 15 August to allow continued sharing after departure. For employees yet to reach their one-year vesting cliff, Cloudflare will waive that requirement and provide pro-rated equity vesting through August.
In a joint statement, co-founders Matthew Prince and Michelle Zatlyn said the actions are not a cost-cutting exercise or a reflection on individuals’ performance, but a step to shape a high-growth company for the agentic AI era, with AI usage reported to have surged by over 600% in the past three months. According to SecurityWeek, the company’s leadership stressed the changes aim to provide clarity to departing staff and stability for the remaining team.