Shares of Cloudflare, Inc. plummeted 22.40% during intraday trading on Friday, as the company faced a severe sell-off following its latest corporate announcements.

The sharp decline was triggered by the cloud services provider's decision to cut approximately 20% of its global workforce, amounting to over 1,100 jobs, coupled with a second-quarter revenue forecast that fell slightly below Wall Street expectations. The company announced the restructuring as part of a strategic pivot to an "agentic AI-first" operating model, citing a more than 600% increase in employee AI tool usage last quarter.

Despite reporting first-quarter revenue that beat analyst estimates, investors were disappointed by the muted forward guidance and the substantial near-term restructuring charges, estimated between $140 million and $150 million. The move reflects a broader trend of companies restructuring operations around artificial intelligence, which Cloudflare's management stated would define how the company creates value in the new era.