Cloudflare, an internet infrastructure and cybersecurity company, has announced significant layoffs, cutting approximately 1,100 jobs, or nearly 20% of its workforce. This decision is driven by advancements in artificial intelligence, which have made certain roles redundant, rather than a conventional cost-cutting strategy. Despite this reduction, Cloudflare reported a record quarterly revenue of $639.8 million for the first quarter of 2026, marking a 34% increase year-on-year. CEO Matthew Prince highlighted that the company's aggressive adoption of AI tools has led to dramatic productivity improvements, with some employees becoming two to 100 times more productive. The company noted a 600% increase in AI usage over the past three months, particularly in software development, where nearly the entire research and development team now utilizes AI-assisted coding tools. While the layoffs represent the first major workforce reduction in Cloudflare's 16-year history, Prince indicated plans to continue hiring in the future, emphasizing the growing value of employees who leverage AI effectively.