Cloudflare stock sinks 18% after earnings as company cuts 1,100 employees due to AI changes

Cloudflare's stock dropped 18% after the company announced it would cut 1,100 employees (20% of its workforce) because agentic AI (AI systems that can autonomously plan and execute tasks) has fundamentally changed what jobs the company needs. Despite beating earnings expectations with strong revenue growth of 34% year-over-year, CEO Matthew Prince stated that the company's AI usage increased over 600% in three months as it shifts to an AI-first operating model, making many current roles obsolete.