May 8, 2026
Cloudflare cut roughly 1,100 jobs — about 20% of its workforce — on Thursday, according to a memo sent to staff and shared on the company’s blog (1). Here’s CEO Matthew Prince and President Michelle Zatlyn explaining the move:
“The way we work at Cloudflare has fundamentally changed,” the blog post states. “That means we have to be intentional in how we architect our company for the agentic AI era in order to supercharge the value we deliver to our customers and to honor our mission to help build a better Internet for everyone, everywhere,” the post further describes. “Today is a hard day. This decision unfortunately means saying goodbye to teammates who have contributed meaningfully to our mission and to building Cloudflare into one of the world’s most successful companies.”
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The silver lining: The Cloudflare execs made special mention that those losing their jobs would receive “severance packages that lead the industry.” Those affected will continue to be paid through the end of the year, as well as get healthcare benefits through the end of 2026 for U.S-based employees, while their equity will continue to vest through the summer, until August 15.
In other words, roughly eight months of paychecks, eight months of insurance, and a few extra months of stock accumulation for over 1,000 people. If you’ve been laid off before, you’re probably thinking this is a pretty sweet deal, all things considered.
It is also, unfortunately, something most American workers will never experience.
Why most American severance falls short
There is no federal law in the United States requiring private-sector employers to pay severance at all. The Worker Adjustment and Retraining Notification (WARN) Act (2), enacted in 1988, requires 60 calendar days’ notice for many mass layoffs at companies with 100 or more employees, but it doesn’t mandate a payout — only the notice. Beyond WARN, severance is whatever the employer chooses to offer, governed mostly by company policy, individual contract, or, occasionally, a collective bargaining agreement.
Typically (3), companies offer one to two weeks of salary per year of service. In other words, if you work somewhere for five years, you get five to 10 weeks of pay. Cloudflare employees, on the other hand, will be paid for the remaining 34 weeks left in the year.
Even within Silicon Valley, what Cloudflare is offering still looks exceptional. When Snap announced 1,000 layoffs last month, Moneywise reported the company offered four months of severance. Again, for context, that’s considered generous by sector standards but still half of what Cloudflare is providing to those laid off. On the healthcare front, continuation of benefits rarely extends past what COBRA already allows at the employee’s expense, and unvested equity typically goes away the moment the employee’s badge stops working, so having extra time for those shares to vest can be a nice sweetener, especially for more senior-level employees.
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What to do about your own severance package
The gap between Cloudflare’s ceiling and the typical American floor is actually something you can have some control over. First, just take a few steps to assess your position.
1. Find your employer’s policy. Many companies publish a severance policy in the employee handbook or on an internal HR portal. If yours doesn’t, ask HR directly for the written policy. You’re entitled to know what you’d receive in a reduction in force, and the answer often differs sharply from what you’d get if you were terminated for cause or resigned voluntarily. Knowing is half the battle here, and gives you something to potentially plan around.
2. Calculate your runway. The Federal Reserve’s annual Survey of Household Economics and Decisionmaking (4) says many Americans cannot cover a $400 emergency expense without borrowing, and most financial planners recommend three to six months of essential expenses in a dedicated emergency fund as a baseline. For most folks, the math looks like this: existing emergency fund + (weekly severance × weeks offered) + state unemployment insurance - monthly expenses.
3. Time your unemployment filing carefully. State unemployment insurance rules vary, and some states reduce or delay unemployment insurance benefits when a worker is receiving severance pay. Others treat lump-sum severance as not affecting eligibility at all. Filing the day after you’re laid off without checking your state’s offset rules can mean leaving money on the table — or, in some cases, an overpayment notice months later. The U.S. Department of Labor’s CareerOneStop tool (5) links to each state’s UI office, where the specific rules are spelled out.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Cloudflare Blog (1); U.S. Department of Labor (2); Oyster HR (3); Federal Reserve (4); CareerOneStop (5)
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Dave Smith is the VP of Content at Wise Publishing and Editor-in-Chief at Moneywise and Money.ca. His work has also been published in Fortune, Business Insider, Newsweek, ABC News, and USA Today.
