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Freshworks was one of the first Indian SaaS companies to be listed on the Nasdaq stock exchange. The restructuring is expected to cost the firm one-time charges of about $8 million.
This was my first time covering layoffs of this scale, and boy, was it intense. (Representative Image)(Image: Pixabay)Software company Freshworks announced is set to trim 11% of its global workforce, or roughly 500 job roles, as rapid advances in artificial intelligence (AI) pushes the tech sector towards automation-driven profitability. The layoffs are expected to impact both its India and US operations.
Freshworks is a cloud-based software-as-a-service (SaaS) company, founded in 2010 in Chennai, Tamil Nadu. It provides tools for customer relationship management, IT service management, and e-commerce marketing. Freshworks was one of the first Indian SaaS companies to be listed on the Nasdaq stock exchange.
The announcement comes at a time when the tech sector is grappling with layoffs in the US and around the world, including India.
AI's bane: $8 million restructuring
As of 31 December 2025, the company had nearly 4,500 full-time employees. The restructuring is expected to cost the firm one-time charges of about $8 million. The bulk of the restructuring cost will be recognised in Q2 of 2026, Freshwork's CFO Tyler Sloat said during the company's Q1 earnings call on 6 May.
Meanwhile, the company's CEO Dennis Woodside said that the layoffs were driven partly by the use of AI in product and engineering, as well as automation of routine work across the business.
"Over half of our code is written by AI," Woodside told Reuters, adding that automation had reduced "rote work that technology can take care of."
He added that the savings from merging sales teams, reducing management layers and automating work would be reinvested in Freshworks' Employee Experience business, which includes its IT service management software Freshservice.
Existential Threat to Tech
At the same time, AI tools from Anthropic and others have emerged as potential existential threats to traditional software makers, hammering shares of companies ranging from Freshworks to larger rivals such as Salesforce and ServiceNow.
According to layoffs.fyi, an independent real-time tracker of job losses, reported that over 93,200 tech employees have been laid off in 2026 so far. By comparison, 124,201 tech employees were laid off in the whole of 2025.
Separately, Freshworks said it expects second-quarter revenue between $232 million and $235 million, the midpoint of which is above analysts' average estimate of $232.7 million, according to data compiled by LSEG.
In the first quarter, revenue rose 16% to $228.6 million, compared with estimates of $223.24 million. Adjusted profit came in at 11 cents per share, missing estimates of 12 cents.
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