CrowdStrike said Wednesday that it would cut 500 jobs, or 5% of its global workforce, as part of a plan to scale its business and meet a goal of $10 billion in annual recurring revenue, according to a regulatory filing.
In a memo attached to a Securities and Exchange Commission filing, CEO George Kurtz told employees that the company would continue to prudently hire in customer-facing and product-engineering roles but had to make changes in order to operate more efficiently and continue its leadership in the marketplace.
“We’re operating in a market and technology inflection point, with AI reshaping every industry, accelerating threats and evolving customer needs,” Kurtz said in the memo. “To lead at scale, with nearly 10,000 CrowdStrikers and a clear path to $10 billion in ARR, we are evolving how we operate.”
Kurtz cited three factors in the decision: AI investments are accelerating execution and efficiency and are flattening the company’s hiring curve; market demand is driving sustained growth at the company; and the company is scaling its go-to-market and customer success teams as more customers are standardizing on the Falcon platform.
CrowdStrike has been operating in a highly competitive environment, with rival Palo Alto Networks launching a controversial program that offered incentives for companies to migrate to its platforms. This led to a competitive pricing spiral involving multiple companies jockeying to maintain their market shares.
CrowdStrike also faced significant pressure after a global IT outage in July 2024 linked to a faulty software upgrade. More than 8 million Windows computers were temporarily disrupted and rivals soon began to pounce on the opportunity to poach market share from CrowdStrike.
Kurtz acknowledged the cuts would be difficult, and he said that company offices would be closed on Wednesday and Thursday, with employees working from home.
CrowdStrike expects to incur between $36 million and $53 million in charges, with $7 million recognized during the first quarter of fiscal year 2026, which ended on April 30, and almost all of the remainder during the second quarter.
The charges include between $19 million and $26 million of cash expenditures for severance, employee benefits and related costs, as well as $10 million to $20 million in non-cash charges for stock-based compensation.
CrowdStrike expects to complete the job cuts by the end of the second quarter.
The company reaffirmed its earnings outlook provided back in March and will continue to hire in strategic areas throughout the fiscal year, which ends Jan. 31, 2026.
Earnings for the first quarter will be released on June 3 after the market closes.
