Cloudflare used its first-quarter earnings release to announce one of the clearest AI-linked workforce cuts yet from a major infrastructure company. The company said it expects to reduce its workforce by approximately 1,100 people as it restructures around what it calls an "agentic AI-first operating model."

The timing is notable because the cuts came alongside strong financial results, not a revenue miss. Cloudflare reported $639.8 million in first-quarter revenue, up 34% year over year, and said current remaining performance obligations also grew 34%. In the same press release, the company estimated $140 million to $150 million in restructuring charges, with most of that expected in the second quarter.

In a separate note to employees published on Cloudflare’s blog, founders Matthew Prince and Michelle Zatlyn said internal AI usage had risen more than 600% in the previous three months and that staff across engineering, HR, finance, and marketing now run thousands of AI agent sessions each day. They argued the layoffs were not a cost-cutting exercise tied to individual performance, but a redesign of roles and processes for the AI era.

That framing matters. Tech companies have talked for months about AI-driven productivity gains, but Cloudflare is one of the first major internet infrastructure firms to connect those gains this explicitly to a company-wide headcount reduction while still reporting rapid top-line growth.