Loss of 5% of Staff Is Cybersecurity Industry’s Second-Largest Workforce Reduction
By Michael Novinson (MichaelNovinson)
CowdStrike plans to axe 500 employees as the endpoint security behemoth looks to operate more efficiently, saying the company’s use artificial intelligence technology “flattens our hiring curve.”
The Austin, Texas-based vendor on Wednesday revealed plans to reduce its nearly 10,000-person staff by 5 per cent to scale its business with more focus and discipline as it pursues its goal of US$10 billion in annual recurring revenue. CrowdStrike’s workforce reduction is the second-largest round of layoffs from any pure-play cybersecurity provider since the onset of the COVID-19 pandemic in March 2020.
“I know this is difficult news and it affects all of us,” CrowdStrike founder and CEO George Kurtz wrote in a note to employees, which was subsequently shared in a regulatory filing. “These decisions were made with care and guided by a clear view of where we need to go.”
CrowdStrike’s stock is down US$19.11 – or 4.31 per cent – to US$424.10 per share in trading early Wednesday, which is the lowest the company’s stock has traded since April 28. The firm Wednesday reaffirmed its guidance for the fiscal year ending Jan. 31, 2026, and said its results for the fiscal quarter ended April 30 will be in line or above its March guidance. Blue-chip vendors typically beat or raise previously stated guidance.
CrowdStrike to Spend Up to $53M Carrying Out Layoffs
The company expects to spend between US$36 million and US$53 million to carry out the cuts, with between US$19 million and US$26 million going toward severance payments and between US$10 million and US$20 million going toward stock-based compensation. CrowdStrike spent US$7 million on the strategic plan in the quarter ended April 30, and expects actions associated with the plan will be complete by the end of July.
“We’re operating in a market and technology inflection point, with AI reshaping every industry, accelerating threats, and evolving customer needs,” Kurtz told employees. “To lead at scale, with nearly 10,000 CrowdStrikers and a clear path to US$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.”
CrowdStrike will continue to “prudently hire,” primarily in customer-facing and product engineering roles, Kurtz said. The company employed 10,118 staff as of Jan. 31, 2025, up 27.7 per cent from 7,925 workers in January 2024, 39.1 per cent from 7,273 workers in January 2023, and 103.8 per cent from 4,965 workers in January 2022. The company didn’t answer questions about which departments were most affected by the cuts.
“AI flattens our hiring curve and helps us innovate from idea to product faster,” Kurtz wrote in the note to employees. “It streamlines go-to-market, improves customer outcomes, and drives efficiencies across both the front and back office. AI is a force multiplier throughout the business.”
Roughly half of CrowdStrike’s workforce is involved in engineering, 40 per cent work with with sales, with the remaining 10 per cent involved in operations and human resources, according to IT-Harvest. Nearly 60 per cent of CrowdStrike employees are based in the United States, with 9 per cent based in India, 8 per cent based in the United Kingdom, 5 per cent based in Australia, and 20 per cent based in Germany, Israel, Japan and Romania, IT-Harvest said.
Second-Largest Round of Cyber Layoffs Since 2020
CrowdStrike closed its offices Wednesday and Thursday and directed all employees to go from home, according to Kurtz. He said laid off employees will receive severance in alignment with tenure and role, access to any restricted stock units vesting in June, bonuses for the fiscal quarter ended April 30, health benefits coverage, and career services aligned with local standards.
“To those leaving CrowdStrike: thank you,” Kurtz told employees. “We’re grateful for your contributions to our mission. We’re committed to supporting you through this transition with respect, care and resources.”
Of the 101 pure-play cybersecurity vendors to disclose layoffs since the onset of COVID-19 in 2020, only OneTrust cut more workers in a single round than CrowdStrike, according to Layoffs.FYI. The Atlanta-based privacy vendor in June 2022 laid off 25 per cent of its staff – or 950 workers. F5 in April 2023 laid off 623 of its 7,100 employees, but the company generates much of its revenue from application delivery.
CrowdStrike has faced multiple challenges over the past year. A faulty July 2024 software update to CrowdStrike’s Falcon platform disrupted 8.5 million systems, led to longer sales cycles and a lawsuit from customer Delta Airlines, and resulted in US$60 million of expenses between July 2024 and January 2025, centered primarily around legal and professional services expenses.
The company is also navigating significant economic uncertainty related to the Trump administration’s April announcement of a new 10 per cent baseline tariff on all imports as well as additional, country-specific taxes on goods from a host of other countries. The country-specific measures were subsequently paused for 90 days, but the baseline tariff remains, which some industry executives said led to a slowdown in spending starting in March.
“Our responsibility is aligning our mission with customer, market, and business needs,” Kurtz told CrowdStrike employees. “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.”
