Cloudflare Shares Plunge on Weak Outlook as Company Cuts 1,100 Jobs in AI Shift

Cloudflare is a US cloud infrastructure company providing content delivery, cybersecurity and developer platforms that support a large number of websites and enterprise applications. As generative AI drives demand for internet traffic and computing power, the company is reshaping its internal operations around AI agents. Revenue growth, guidance and staffing changes have therefore become key measures of the transition’s effectiveness.

Cloudflare reported first-quarter results for the period ended March 31 on May 7, 2026. Revenue rose 34% from a year earlier to $639.8 million, while adjusted earnings were $0.25 per share, with both figures beating expectations. Its second-quarter revenue forecast of $664 million to $665 million was slightly below analysts’ estimates, sending the shares down 19% in after-hours trading. The company also announced plans to cut 1,100 jobs, or 20% of its workforce, and expects restructuring charges of $140 million to $150 million. The process is expected to be largely completed by the end of the third quarter.