Cloudflare trades staff for AI
Wall Street Breakfast
Seeking Alpha
4.1 • 1K Ratings
🗓️ 8 May 2026
⏱️ 5 minutes
🧾️ Download transcript
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Transcript
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| 0:00.0 | Welcome to Seeking Alpha's Wall Street Breakfast, where we cover the top news for investors every morning. |
| 0:07.6 | It's good to be with you on this Friday, May 8th. I'm Julie Morgan. |
| 0:13.6 | Cloudflare is set to lay off more than 1,100 employees globally or about 20% of its workforce. |
| 0:20.7 | The company is ramping up its shift to an agenic AI-first operating model to boost efficiency |
| 0:26.5 | and productivity. |
| 0:28.1 | The announcement came as Cloudflare posted better than expected Q1 results, although its |
| 0:33.7 | shares sank 19% after hours on Thursday and are down 16% in pre-market action. |
| 0:40.6 | The company's CEO Matthew Prince said in an earnings call that they are reimagining every internal |
| 0:46.7 | process from engineering to finance to sales to run on an agenic AI backbone on their workers' |
| 0:53.6 | platform. |
| 0:54.8 | He added that this is not a cost-cutting exercise or an assessment of the individual's performance. |
| 1:01.0 | He said that it is about defining how a world-class high-growth company operates |
| 1:05.9 | and creates value in the agentic AI era. |
| 1:09.6 | In a blog post, Cloudflare noted that AI use across the company |
| 1:13.6 | increased more than 600% in the last three months. Prince also said that AI and agents are no longer |
| 1:20.9 | pilot projects at Cloudflare. They are now core parts of the workforce. The layoffs will result in severance and other restructuring charges of $140 million to $150 |
| 1:32.5 | million in 2026, of which around $40 million is non-cash, with a majority concentrated in Q2. |
| 1:41.9 | Upwork is also reducing its workforce. On Thursday, the company announced a restructuring |
| 1:47.5 | plan under which it will reduce the company's total workforce by about 24%. Upwork estimates that it |
| 1:54.5 | will incur between $16 million and $23 million in pre-tax charges in connection with the restructuring plan. |
| 2:02.4 | The company expects most of these charges to be cash expenditures |
| 2:06.1 | and to be recognized over the next two or three quarters, |
... |
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