Cloudflare exceeded Wall Street’s revenue and earnings forecasts on Wednesday, but announced a significant workforce reduction of 1,100 employees. The company attributed the layoffs to increased efficiency through artificial intelligence agents handling tasks previously performed by staff. Following the announcement, Cloudflare’s stock price plummeted 24% on Thursday. This scenario is becoming a common pattern in the tech sector in 2026: strong financial results paired with large-scale job cuts and investor uncertainty.
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