CrowdStrike—firm behind global IT outage—cuts 500 jobs amid AI integration
What's the story
US-based cybersecurity firm CrowdStrike, which was responsible for causing a major global IT outage last year, has announced plans to lay off 5% of its workforce. In a recent staff memo, the company's CEO, George Kurtz, said about 500 positions will be eliminated globally due to "AI efficiencies" in the business. The decision comes amid other factors like market demand for sustained growth and an expanding product range.
AI impact
AI reshaping industries, says CrowdStrike CEO
Kurtz stressed the transformative nature of artificial intelligence (AI) on industries, saying it is "reshaping every industry, accelerating threats, and evolving customer needs." He also explained how AI can simplify hiring processes and accelerate innovation from idea to product. The CEO also noted that AI improves operational efficiency in both front and back office functions.
Financial implications
Job cuts may cost the CrowdStrike $53 million
CrowdStrike expects to incur costs as high as $53 million from these job cuts. Nevertheless, the company reported $1 billion in revenue for the fourth quarter of fiscal 2025, a 25% increase from the same period in 2024, but posted a $92 million loss. The job cuts come after CrowdStrike's software update triggered a global IT outage last year, causing 8.5 million Windows systems around the world to crash.
Expert opinions
Experts express skepticism and concern over AI job cuts
Aaron McEwan, VP of research and advisory at Gartner, was skeptical about companies citing AI efficiencies while announcing job cuts, particularly when confronted with revenue forecasts. He noted that companies are under pressure to deliver returns on the massive investments made in AI. CrowdStrike's decision was also criticized by Toby Walsh, an artificial intelligence professor at the University of New South Wales, as "pretty tone deaf" after last year's outage.
Job displacement
AI job replacements seen as 'unavoidable reality'
Niusha Shafiabady, an associate professor in computational intelligence at the Australian Catholic University, described AI job replacements as an "unavoidable reality." She warned that many traditional jobs will be lost to AI and technology. A 2023 World Economic Forum report predicted that nearly 23% of all jobs globally will change within five years due to AI and other macroeconomic trends.