Cybersecurity firm CrowdStrike Holdings will cut 5% of its workforce, or 500 jobs, the company said in a regulatory filing. The news came ahead of first quarter earnings for CrowdStrike stock due June 3.
The company said artificial intelligence-related productivity gains were a factor in the layoffs. CrowdStrike said it plans to continue hiring in strategic areas.
In the regulatory filing, CrowdStrike estimated the job cuts will lead to charges of $36 million to $53 million, with $7 million to be recognized in the first quarter of its fiscal 2026 year, and the rest in its second quarter.
Also, CrowdStrike reaffirmed fiscal 2026 guidance and indicated Q1 results in line with or above guidance issued in March. CrowdStrike's fiscal year ends Jan. 31.
"We're operating in a market and technology inflection point, with AI reshaping every industry, accelerating threats, and evolving customer needs," CEO George Kurtz said in a letter to employees. "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."
He added: "AI investments accelerate execution and efficiency: 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. AI is a force multiplier throughout the business."
On the stock market today, CrowdStrike stock fell more than 4% to 424. CrowdStrike stock has climbed 29% in 2025 as of Tuesday's market close.
Wall Street Reaction To Job Cuts
The layoffs surprised some analysts.
"We found the announcement interesting coming from a high growth cybersecurity vendor, but believe management is proactively evolving and refocusing the business on long-term drivers and opportunities through the (reduction in force) vs. a reactive measure due to a demand issue," said RBC Capital analyst Matthew Hedberg in a report.
"While the stock could be range-bound into earnings on June 3, the move likely buoys the outlook around operating income that, as a reminder, was slightly lower for fiscal 2026 vs. consensus at the time when provided last quarter."
At Raymond James, analyst Adam Tindle holds a similar view.
"(Management) messaging seems to indicate that this is more about streamlining operations/gaining efficiencies with a commitment to expanding go-to-market operations, but we get nervous when an elite growth company decides to introduce layoffs as this can impact the culture of the company," he said in a report.
"In short, this should provide healthy upside to the financial model near term, but we intend to monitor sentiment at the company through partner checks as this can impact the longer-term growth trajectory."
CrowdStrike competes with Palo Alto Networks, SentinelOne, Microsoft and others in the "endpoint" market. Endpoint security tools detect malware on laptops, mobile phones and other devices that access corporate networks.
Global IT Outage Pressures Key Metric
Also, CrowdStrike is building a broad, threat-detection cybersecurity platform called XDR, which stands for extended detection and response. It monitors endpoints as well as web/email gateways, web application fire walls and cloud business workloads.
A July 2024 global IT outage has pressured CrowdStrike's annual recurring revenue, or ARR. It's a key financial metric tied to subscription services growth. Analysts have lowered estimates for "net new" ARR amid expectations that many customers have been getting price discounts when renewing contracts to help cover the cost of business disruptions. A software upgrade caused the IT outage.
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