Cloudflare trades staff for AI
5/8/20265 min
Cloudflare (NET) to cut 1,100 jobs amid shift to agentic AI-first operating model. (00:13) Upwork (UPWK) announces 24% reduction in total workforce. (01:42) IREN jumps 7%, inks five-year $3.4B AI cloud deal with Nvidia (NVDA). (02:35)/
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Transcript preview
First 90 secondsJulie Morgan· Host0:00
[upbeat music] Welcome to Seeking Alpha's Wall Street Breakfast, where we cover the top news for investors every morning. It's good to be with you on this Friday, May 8th. I'm Julie Morgan. Cloudflare is set to lay off more than 1,100 employees globally, or about 20% of its workforce. The company is ramping up its shift to an agentic AI-first operating model to boost efficiency and productivity. The announcement came as Cloudflare posted better-than-expected Q1 results, although its shares sank 19% after hours on Thursday and are down 16% in pre-market action. The company's CEO, Matthew Prince, said in an earnings call that they are reimagining every internal process from engineering to finance to sales to run on an agentic AI backbone on their Workers platform. He added that this is not a cost-cutting exercise or an assessment of the individual's performance. He said that it is about defining how a world-class, high-growth company operates and creates value in the agentic AI era. In a blog post, Cloudflare noted that AI use across the company increased more than 600% in the last three months. Prince also said that AI and agents are no longer pilot projects at Cloudflare. They are now core parts of the workforce. The layoffs will result in severance and other restructuring charges