CrowdStrike Holdings Inc (NASDAQ:CRWD) said it will lay off 500 workers to reduce costs as artificial intelligence takes more of a role in its operations.
Removing around 5% of the cybersecurity group's current employees was said to be about reducing costs.
Shares in the company fell 3.9% to $425.98 on Wednesday morning trading.
"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 staff.
"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."
Kurtz 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."
The firm reaffirmed its annual revenue forecast and said it will continue to hire in “key strategic areas” this year.
RBC Capital analysts said the announcement was "interesting, coming from a high growth cybersecurity vendor".
But the analysts said they believe management "is proactively evolving and refocusing the business on long-term drivers and opportunities" with the layoffs compared to being a "reactive measure due to a demand issue"
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", they added.