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CrowdStrike Cuts 5% Workforce, Cites AI Efficiency

Market IntelWednesday, May 7, 2025 10:08 pm ET

1min read

CrowdStrike, a leading cybersecurity software company, announced on Wednesday that it plans to lay off 500 employees, which constitutes approximately 5% of its total workforce. The decision to reduce the workforce was attributed to the advancements in artificial intelligence (AI) technology, as communicated by Chief Executive Officer George Kurtz. In a memo submitted to securities regulators, Kurtz stated that the company is restructuring certain business operations to achieve scalable growth in a more focused and prudent manner.

Kurtz emphasized that AI has been a cornerstone of CrowdStrike's operations, enabling the company to flatten its hiring curve and accelerate the conversion of ideas into products. AI also optimizes the go-to-market process, enhances customer service, and drives efficient operations across both front-end and back-end business functions. Kurtz described AI as a powerful efficiency booster within the company's overall operations.

Over the past month, several other companies have mandated the use of AI tools across various departments. CrowdStrike reiterated its financial performance expectations for the fiscal year ending in January 2024 and indicated plans to continue hiring in key strategic areas for the remainder of the year. Despite the layoffs, the company's stock price experienced a decline of approximately 5% on Wednesday, closing at 421.52 dollars.

Kurtz revealed that the company is focusing on expanding its market development and customer success teams to achieve its goal of annualized revenue of 100 billion dollars. In February, CrowdStrike reported a 25% increase in revenue, reaching 10.6 billion dollars, although this marked the second consecutive quarter of net loss.

While CrowdStrike attributes the layoffs primarily to AI advancements, other industries have also seen significant job cuts due to economic and market uncertainties. In February, Autodesk announced a 9% reduction in its workforce, and in March, server manufacturer Hewlett Packard Enterprise announced a 5% reduction. These layoffs occurred before the recent announcement of new tariffs on imported goods, which further disrupted the market.

CrowdStrike expects the layoff process to be completed by the end of the second quarter of the fiscal year, with estimated costs ranging from 36 million to 53 million dollars. Despite the stock price decline on Wednesday, CrowdStrike's stock has risen 23% year-to-date, outperforming the index, which has declined approximately 8%.

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