Is AI just a convenient excuse for job cuts? CrowdStrike’s move raises eyebrows
Cybersecurity giant CrowdStrike, which made headlines last year for causing a global IT outage, has announced plans to reduce its global workforce by 5% as part of its strategic shift towards leveraging artificial intelligence (AI) to drive efficiencies.
CEO George Kurtz revealed the decision earlier this week, citing AI as a core driver of cost-cutting and business transformation.
In a formal note to staff, which was later filed with the US stock market, Kurtz outlined that the company would be cutting 500 positions worldwide, attributing the layoffs in part to “AI efficiency.”
The company anticipates up to $53 million in costs due to these job cuts.
“We’re operating in a market and technology inflection point, with AI reshaping every industry, accelerating threats, and evolving customer needs,” Kurtz said.
AI, he added, has allowed the company to “flatten our hiring curve” and accelerate innovation, enabling them to go from “idea to product faster.”
AI, according to Kurtz, is now a “force multiplier” throughout the business. However, the decision to implement job cuts has raised eyebrows, with some questioning whether AI is merely a convenient justification for a business grappling with financial pressures.
The global IT outage CrowdStrike caused last year—due to a faulty update that brought down 8.5 million Windows systems—left a lasting mark on the company’s reputation. The outage disrupted airports, hospitals, TV networks, payment systems, and personal devices worldwide.
With the company now laying off workers, many are wondering if AI efficiency is truly the driving force behind the decision or if the company is simply navigating the economic fallout of its previous missteps.
Aaron McEwan, vice president of research and advisory at Gartner, expressed skepticism over the company’s AI-driven justification for job cuts.
“I think particularly in the tech sector … it’s a way of justifying a reduction in the workforce because [of] a financial issue,” McEwan said. “So either they’re not tracking well financially, or they’re trying to send a message to investors that good times are around the corner.”
McEwan further noted that many companies were under pressure to deliver on the big investments they’ve made in AI, but the expected productivity gains have not yet materialized.
Gartner research supports this, revealing that less than half of employees are using AI in their jobs, and a mere 8% are using AI tools to improve productivity.
Toby Walsh, professor of artificial intelligence at the University of New South Wales, criticized the timing of the announcement.
“It’s pretty tone deaf,” he said, especially considering the significant IT outage CrowdStrike faced last year. “They would have been better redeploying this 5% of people to emergency response and bug fixing.”
Despite the controversy, Walsh predicted more such announcements would follow. “It’s pretty simple: more profits for companies, less work for workers,” he stated.
Walsh also emphasized that workers should stand together in solidarity to ensure that the savings from AI are redirected to improving work quality for all.
Niusha Shafiabady, an associate professor in computational intelligence at the Australian Catholic University, echoed this sentiment, calling AI-driven job replacements an “unavoidable reality.”
“No matter what we believe is moral and right, this change will happen. Unfortunately, a lot of people will lose their traditional jobs to AI and technology,” she said.
A 2023 World Economic Forum report painted a sobering picture of the future of work. It forecast that nearly 23% of all jobs worldwide will change in the next five years due to AI and other macroeconomic trends.
While 69 million new jobs are expected to be created, 83 million jobs could be eliminated, leading to a net decrease of 2%.
McEwan also pointed out that the tech industry, in particular, will likely continue to explore ways to reduce their workforces by leveraging AI.
“I have no doubt that there will be the emergence of companies that are able to reduce their workforce substantially because of AI,” he said.
However, he also stressed that AI should be used to augment the workforce rather than replace it entirely.