CrowdStrike will shed 5% of its workforce over the next few weeks, a reflection of its push to grow revenues and a strategy that will see AI assume some of the duties that human employees have now.
The company in a
filing with the U.S. Securities and Exchange Commission (SEC) this week said it will layoff about 500 workers as part of its larger effort to make its operations more efficient and hit $10 billion in annual recurring revenue (ARR).
At the same time, CEO
George Kurtz in a
letter to employees stressed the importance of AI in improving the Ausin, Texas-based company’s execution and efficiency, writing that “AI has always been foundational to how we operate. 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.”
Kurtz added that “AI is a force multiplier throughout the business.”
The company will continue to hire people in customer-facing and product engineering roles, but jobs in other parts of the business will be cut, the CEO said.
The Good and Bad With AI
The announcement highlights both the demand companies like CrowdStrike are under from the industry and investors to increase revenues and take advantage of multi-billion business opportunities, while realizing some worker fears that the rapidly evolving capabilities in AI could eventually take over their jobs.
What’s happening with CrowdStrike and in the cybersecurity industry as whole, with AI increasingly being used for more tasks, is not unique, according to
J. Stephen Kowski, field CTO for
SlashNext Email Security+. The technology is used to automate jobs like threat detection, analysis of massive amounts of data, and real-time attack response, all of which frees up security teams to address larger problems rather than constantly reacting to alerts.
Happening Everywhere
“This is similar to what’s happening in other industries, where AI is taking over repetitive tasks, helping people make better decisions, and even changing how companies hire and grow,” Kowski told MSSP Alert. “The main difference is that in cybersecurity, AI is also used to fight off AI-powered attacks, so it’s like a race between defenders and attackers both using smarter tools.”
What companies are hit by this depends on how the Ais have been trained and what work the firms do, according to
Rob Enderle, principal analyst with
The Enderle Group.
“Businesses that work with text, programming, some types of research, and interaction over the phone [like with] call centers, are seeing the biggest jumps in productivity and are most likely to consider downsizing,” Enderle told MSSP Alert. “Companies that aren’t in AI’s focus areas aren’t seeing as much benefit yet. Security is one of the industries that is getting a lot of AI focus and while I’d hoped the efforts would focus more on areas that are currently understaffed rather than eliminating existing jobs, that clearly isn’t what is happening.”
Workers Concerned About AI
The worry about jobs is real, even if there is a debate about how significantly AI will contribute to widespread layoffs. A
survey of 5,273 workers by the Pew Research Center found that 52% of respondents said they’re concerned about the long-term use of AI in the workplace and 32% said it will lead to fewer job opportunities for them.
About 16% of workers said that at least some of their work is now being done with AI and 25% said that even though they’re not using it much now, at least some of their duties can be done with AI.
AI Reshaping All Industries
In his letter to workers, CrowdStrike’s Kurtz said that the company is “operating in a market and technology inflection point, with AI reshaping every industry, accelerating threats, and evolving customer needs. To lead at scale, with nearly 10,000 CrowdStrikers and a clear path to $10 billion in ARR, we are evolving how we operate. We’re building on what works, simplifying execution, and doubling down on our highest-impact opportunities.”
According to the company’s latest financial report in March, CrowdStrike in its fiscal year 2025
reached $4.24 billion in ARR, including $807 million in new recurring revenue. The company also is expecting to see the opportunities for its AI-native XDR (extended detection and response) platform to grow rapidly. This year, the total addressable market stands at $116 billion; in FY 2029, it should reach $250 billion.
With the job cuts, CrowdStrike executive expect the company to see $36 million to $53 million in charges connected with the plan. That includes about $19 million to $26 million related to severance payments, employee benefits, and related costs.
MSSPs' Role Unclear
How this sort of situation – a major cybersecurity vendor expanding its use of AI and shedding jobs – will affect MSSPs and MSPs remains to be seen. However, they need to see the advantages AI brings to their businesses, allowing them to do more with less, including serving more clients, handling more security incidents, and offering new services without having to add as many people as possible, Kowski said.
“There might be some new business up for grabs if companies' trim staff, but the bigger opportunity is using AI to improve efficiency, reduce costs, and offer smarter, proactive security for customers,” he said. "The ones who use AI well will pull ahead, since they can work faster, scale up easily, and keep up with new threats as they appear.” Enderle was less optimistic, at least in the short-term, saying that “sadly, I think it is more a focus on saving money than expanding capabilities right now, but both trends are active.”
