Security giant CrowdStrike has revealed it will lay off 500 workers as part of "strategic plans" to reach $10 billion in annual recurring revenue (ARR) — with hopes AI can help get it there.
CrowdStrike made headlines last summer after a defect in an update dramatically knocked offline a wide range of businesses using Microsoft software. That global IT failure sparked a shareholder lawsuit as well as a $500 million damages suit from customer Delta.
The company is choosing to look to the future with a strategic plan to "evolve its operations to yield greater efficiencies" and scale the business to reach that $10bn ARR goal, CrowdStrike said in a filing.
When CrowdStrike posted its fourth quarter and fiscal year 2025 results in March, the company said it had grown ARR year-over-year 23% to $4.24bn, with full year operating cash flow of $1.38bn.
A first step in achieving that $10bn ARR goal will require slashing 500 roles, or about 5% of the company's global workforce, though CrowdStrike added that it expects to hire in "key strategic areas" over the next year.
CEO George Kurtz said in a note to staff that hiring will focus on customer facing roles and product engineering.
"We are realigning parts of our business to continue scaling with focus and discipline," Kurtz added. "These changes position us to move faster, operate more efficiently, and continue our cybersecurity leadership."
CrowdStrike eyes strategic AI gains
Under a section titled "why we're doing this", Kurtz discussed the impact of AI, saying it was a market and technology inflection point, adding that CrowdStrike was building on "what works" and "doubling down on our highest-impact opportunities".
That includes focusing on expanding growth areas such as identity, cloud, and exposure management, as well as investing in "go-to-market" and customer facing roles to help deliver a faster return on investment and better outcomes for customers. But alongside those points, Kurtz pointed to the need to invest further in AI.
"AI has always been foundational to how we operate," he wrote. "AI flattens our hiring curve, and helps us innovate from idea to product faster. It streamlines go-to-market, improves customer outcomes, and drives efficiencies across both the front and back office."
"I’ve never been more optimistic about our future as I am right now. What I know, and what I believe the market knows, is that in an AI-accelerated society, the world needs CrowdStrike more than ever,” he later added.
Kurtz — who reportedly made just shy of $47m in 2024 — thanked those who were departing the company in the letter to staff.
"We’re grateful for your contributions to our mission."
The mention of the strategic impact of AI alongside job cuts echoes previous announcements by tech companies. In February, Workday said it was slashing 8.5% of its workforce as it focuses on AI, while last year Dropbox, Intuit, and SAP made similar moves.
Earlier this week, a survey by Orgvue showed 39% of business leaders in the UK had cut jobs as a result of AI adoption — but more than half believe they may have acted too hastily.
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