What happened: Cloudflare (NET) stock fell 23% on Friday.
What’s behind the move: The cloud security company issued a second quarter sales forecast that fell short of analyst expectations and said it would slash roughly 1,100 jobs, or about a fifth of its workforce, as it adopts artificial intelligence tools in its operating model.
“With AI and agents now core parts of our workforce, the way we work at Cloudflare has fundamentally changed,” Matthew Prince, Cloudflare co-founder and CEO, said in a statement.
The tech giant’s projected revenue for the current quarter came in between $664 million and $665 million, which was below the $666.1 million expected by Wall Street.
What else you need to know: Cloudflare is the latest tech company to announce a workforce reduction as it spends money on artificial intelligence tools, such as AI agents, to do tasks previously performed by workers.
Earlier this week, Coinbase (COIN) announced it would cut 14% of its workforce, or roughly 700 workers, due to market conditions and AI adoption.
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