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- Cloudflare (NET) is laying off 1,100 employees, about 20% of its workforce, to accelerate its transition to an agentic AI-first operating model.
- NET emphasizes this move is strategic, aiming to redefine internal processes and value creation in the AI era, not merely a cost-cutting exercise.
- Layoffs will incur $140M-$150M in restructuring charges, mostly in Q2, as AI adoption at NET has surged 600% in three months.
- Upwork (UPWK) is reducing its workforce by 24% after missing Q1 revenue expectations, while IREN (IREN) secured a $3.4B AI cloud deal with Nvidia (NVDA).
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)
This is an abridged transcript.
Cloudflare (NET) 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 (NET) posted better-than-expected Q1 results, although its shares sank 19% after hours on Thursday and are down 16% in premarket action.
"We are reimagining every internal process — from engineering to finance to sales — to run on an agentic AI backbone on our Workers platform," Cloudflare (NET) CEO Matthew Prince said in an earnings call.
"This is not a cost-cutting exercise or an assessment of the individuals’ performance. It is about defining how a world-class, high-growth company operates and creates value in the agentic AI era," he added.
In a blog post, Cloudflare (NET) noted that AI use across the company increased by more than 600% in the last three months.
Prince also said, "AI and agents are no longer pilot projects at Cloudflare; they are now core parts of our workforce."
The layoffs will result in severance and other restructuring charges of $140M-$150M in 2026, of which around $40M is non-cash, with the majority concentrated in Q2.
Upwork (UPWK) is also reducing its workforce.
On Thursday the company announced a restructuring plan, under which it will reduce the company’s total workforce by about 24%.
Upwork (UPWK) estimates that it will incur between $16 million and $23 million in pre-tax charges in connection with the restructuring plan.
The company expects most of these charges to be cash expenditures and to be recognized over the next two or three quarters, with the majority of these charges in the second quarter of 2026.
Shares of Upwork were down over 18% in extended trading after the company posted first-quarter revenue of $195.48M (+1.4% Y/Y), missing consensus by $0.42M. It also issued a less-than-anticipated revenue forecast for the current quarter.
IREN (IREN) has secured a five-year AI cloud services contract worth about $3.4B with Nvidia (NVDA).
IREN will provide managed GPU cloud services for the chipmaker’s internal AI and research workloads.
The stock price is up about 7% in early trading. Meanwhile, its fiscal Q3 revenue missed the average analyst estimate as the average price of bitcoin declined.
IREN (IREN) also said it will acquire Spain-based Nostrum Group to expand its AI cloud infrastructure business into Europe, adding about 490MW of secured power capacity and boosting its total portfolio to 5GW.
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Stock index futures are higher as U.S.-Iran tensions remained heightened, while traders looked forward to the April jobs report.
The U.S. military attacked military sites in Iran in retaliation for Iran launching projectiles at Navy warships that were transiting the Strait of Hormuz to the Strait of Oman.
Crude oil is down 0.3% at $94. Bitcoin is down 0.1% at $79,000. Gold is up 0.6% at $4,715.
The FTSE 100 is down 0.6% and the DAX is down 1.3%.
The biggest movers for the day premarket: Block (XYZ) +8% - Shares jumped after issuing strong Q2 guidance and raising its FY2026 gross profit outlook.