Freshworks is laying off about 500 employees globally, representing nearly 11 percent of its workforce, as the Nasdaq-listed software firm restructures operations to focus on artificial intelligence and operational efficiency.
The move marks another significant restructuring effort by the company as technology firms increasingly recalibrate workforce strategies in response to rapid advances in AI and shifting demand across the software industry.
In an internal letter to employees, Chief Executive Officer Dennis Woodside said the company is reorganizing teams and simplifying management structures to focus on long-term growth areas, particularly AI-driven products and employee experience software.
According to Reuters, Woodside noted that artificial intelligence is already transforming the company’s operations, with AI now generating more than half of Freshworks’ code and automating routine tasks previously handled manually.
The restructuring comes despite solid financial performance. Freshworks reported first-quarter revenue of $228.6 million, up 16 percent year-on-year and ahead of analyst expectations. The company also projected stronger-than-expected revenue for the current quarter.
However, the layoffs reflect a broader trend across the global technology sector, where firms are increasingly redirecting resources toward AI infrastructure, automation, and product development while reducing costs in other areas.
The company expects to incur approximately $8 million in restructuring-related charges, including severance and associated costs.
Freshworks, founded in Chennai and now headquartered in California, has emerged as one of India’s most prominent SaaS success stories. The company became the first Indian software-as-a-service firm to list on Nasdaq in 2021.
The latest cuts also follow earlier rounds of layoffs. In late 2024, Freshworks announced plans to reduce its workforce by 13 percent, affecting around 660 employees globally, as part of a wider restructuring initiative focused on operational efficiency and strategic priorities.
The latest round of job cuts underscores how AI is reshaping hiring patterns across the technology industry. Companies ranging from enterprise software providers to major global platforms have announced workforce cuts in recent months while accelerating investment in automation and generative AI capabilities.
Despite the restructuring, Freshworks continues to position AI as central to its future growth strategy, particularly across customer experience and IT service management products.
The company’s shares have faced pressure this year, reflecting broader investor caution around software valuations and the pace of AI-related transition costs across the sector.
