Cloudflare on Thursday joined a growing list of tech companies — including Meta, Microsoft, and Amazon — that have reported increased revenue alongside massive layoffs, attributing both trends to their use of AI.
Cloudflare, which provides internet security and performance services to millions of websites worldwide, announced it was cutting its workforce by approximately 20%, which equates to 1,100 people, it said as part of its first quarter 2026 earnings report on Thursday.
“We’ve never done something like this in Cloudflare’s history,” co-founder and CEO Matthew Prince said Thursday on the quarterly conference call, marking the first mass layoff in the company’s 16-year history. The company is cutting people from all teams and geographies except for salespeople who carry revenue quotas, CFO Thomas Seifert detailed on the call.
The news of the workforce cuts came as the company reported quarterly revenues of $639.8 million, a 34% year-over-year increase and the highest single quarter in the company’s history. However, this was coupled with a loss of $62.0 million compared with losing $53.2 million in the year-ago quarter.
That widening loss, even as revenue surged, highlights a familiar paradox in Cloudflare’s story: the company is growing fast but has yet to turn a consistent profit. But the loss was a smaller percentage of revenue, and the quarter was coupled with a lot of other positive indicators. For instance, Cloudflare reported that it had over $2.5 billion in “remaining performance obligations,” a year-over-year growth of 34%. RPO is the favorite metric these days to indicate revenue under contract but not yet delivered.
Hence, Prince insisted, the 20% cuts were not to reduce expenses but were strictly because of its use of AI.
“Today’s actions are not a cost-cutting exercise or an assessment of individuals’ performance; they are about Cloudflare defining how a world-class, high-growth company operates and creates value in the agentic AI era,” Prince and Cloudflare co-founder and president, Michelle Zatlyn, wrote in a related blog post about the layoffs.
Prince acknowledged on the call that even though Cloudflare has been selling AI-powered products, it was at first cautious about adopting AI itself.
“Internally, the tipping point was last November. At that point, across our teams, we began to see massive productivity gains, team members who were two, 10, even 100 times more productive than they had been before. It was like going from a manual to an electric screwdriver,” he described.
“Cloudflare’s usage of AI has increased by more than 600% in the last three months alone,” he added.
Prince highlighted the internal use of AI coding, saying that virtually the entire R&D team is now using the company’s own Workers platform — a tool that lets developers build and run software directly on Cloudflare’s global network — including its vibe coding feature. He also noted that 100% of the code produced this way and deployed for use in Cloudflare’s products is “now reviewed by autonomous AI agents.”
But it’s not just developers who are using AI internally, he said. “Employees across the company, from engineering to HR to finance to marketing, run thousands of AI agent sessions each day to get their work done.”
As a result, these highly productive, AI-powered employees require fewer support staff, he argued.
“A lot of the support people that provide support behind them, those roles aren’t going to be the roles that, you know, drive companies going forward,” Prince said.
Interestingly, Prince says that Cloudflare “will continue to hire people, and we’ll continue to invest in them because the people that are embracing these tools are just so much more productive than we’ve ever seen before. I would guess that in 2027 we’ll have more employees than we did at any point in 2026.”
Cloudflare said it ended its first quarter before layoffs with a headcount of about 5,500.
The pattern Prince described — deploying AI gains as justification for workforce reductions even during a period of strong revenue growth — is fast becoming a familiar script across the tech industry. Whether it reflects true structural transformation or acts as a convenient cover for cost discipline is a question that investors and employees will be wrestling with for some time to come.
When asked by an analyst on the call why the company needed to cut so deeply after such a good quarter, Prince said, “Just because you’re fit doesn’t mean you can’t get fitter.”
The Federal Capital Territory Administration (FCTA) has approved the resumption of work on the long-abandoned Utako General Hospital and the renovation and upgrading of 14 other general hospitals across the territory.
The FCT Mandate Secretary for Health and Environmental Services, Adedolapo Fasawe, disclosed this to journalists after the 19th FCT Executive Council meeting on Tuesday, presided over by the FCT Minister, Nyesom Wike.
The intervention, she said, would involve the construction and equipping of the Utako hospital, as well as the provision of medical equipment and improvements to existing facilities across the territory.
Reviving Utako hospital
Ms Fasawe said Mr Wike had directed the immediate commencement of work at the Utako General Hospital, which has remained abandoned for years.
She said the intervention would go beyond the construction of the facility to include its equipping and staffing, with the aim of ensuring that the hospital is able to provide healthcare services when completed.
For the 14 existing general hospitals, she said the administration would procure new medical equipment, including X-ray machines and diagnostic materials, while hospital theatres would also be upgraded.
The interventions, according to her, are intended to improve access to reliable and affordable healthcare for residents of the territory.
Ms Fasawe added that the administration had also continued to meet its financial obligations to health insurance providers and health maintenance organisations (HMOs) through the regular payment of premiums and capitation.
Other council decisions
Beyond the health sector, the FCT Executive Council approved several other projects and interventions at the meeting.
The Chief of Staff to the FCT Minister, Chidi Amadi, said the council considered 20 memoranda presented by various secretariats, departments and agencies.
According to him, the submissions were aimed at advancing infrastructure development and improving public services across the capital.
One of the approvals was the digitalisation of the FCT High Court, covering about 67 courtrooms across its judicial divisions.
The council also approved two contracts for the supply of examination materials to primary, junior secondary and senior secondary school students across the FCT.
The Mandate Secretary for Education, Danlami Hayyo, said the initiative formed part of the administration’s broader efforts to improve public education through facility renovations, better classrooms and continued instructional support.
Mr Hayyo said the improvements had encouraged some parents to transfer their children from private schools to public schools.
The Satellite Towns Development Department (STDD) also secured approval for a N5.703 billion contract for the construction of a 33KV power supply line from Dawaki to Tukulo and surrounding villages in Bwari Area Council.
The STDD Coordinator, Abdulkadir Zulkiflu, said CGC Nigeria Limited was awarded the contract and that the project would be completed within eight months.
The council also ratified two road projects in the satellite towns that had already been completed and commissioned.
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The Federal High Court in Jos, Plateau State, has stopped Jonathan Akuns from presenting himself as the governorship candidate of the Nigeria Democratic Congress (NDC) for the 2027 election.
Justice S.T. Ishaya issued the order on September 28 after considering an ex parte application filed by Alfred Dapal, a governorship aspirant challenging the party’s nomination process.
The case, marked FHC/J/CS/87/2026, has Mr Akuns as the first defendant, the NDC as the second defendant and the Independent National Electoral Commission (INEC) as the third defendant.
The judge ordered Mr Akuns not to announce, publish or otherwise present himself as the NDC governorship candidate until the court hears and determines the case.
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Mr Dapal told the court that he was the candidate produced by the NDC during its governorship nomination exercise held on September 15 at the party’s secretariat in Dogon Karfe, Jos North Local Government Area.
He is asking the court to stop the NDC, its officials and agents from replacing, withdrawing or removing him as the party’s candidate until the case is decided.
He also wants the court to stop the NDC from submitting Mr Akuns’ name to INEC as its governorship candidate in his place.
Mr Dapal further asked the court to prevent INEC from accepting, recognising, publishing or acting on Mr Akuns’ name as the NDC candidate for Plateau State.
Another request seeks an order directing all parties to maintain the position that existed after the September 15 nomination exercise until the case is finally determined.
The plaintiff also asked for an accelerated hearing because of the statutory deadlines for pre-election cases.
Justice Ishaya ruled that the application had succeeded in part and adjourned the case until October 5 for hearing.
The order was signed by the judge and issued under the seal of the Federal High Court by the Registrar, Chioma A. Eze.
The order does not amount to a final decision on who should hold the NDC governorship ticket in Plateau State. The court will still consider the competing claims arising from the party’s nomination process.