Freshworks said on Tuesday it will reduce its workforce by approximately 11%, affecting about 500 employees worldwide, as the business-software company adjusts to a software industry being reshaped by artificial intelligence.
The company attributed the layoffs in part to AI-driven changes in its product and engineering functions and to the automation of routine tasks across its operations. CEO Dennis Woodside said that "Over half of our code is written by AI," and added that automation had reduced "rote work that technology can take care of."
Freshworks said the restructuring will span departments globally and will generate one-time charges of about $8 million. The company reported that, as of December 31, 2025, it employed roughly 4,500 full-time workers. Management indicated that cost savings from actions such as merging sales teams, trimming management layers and automating tasks will be reinvested in its Employee Experience business, which includes its IT service management offering, Freshservice.
The announcement is the latest in a wave of workforce reductions within the software sector tied to the adoption of generative AI and automation. Peer Atlassian, for example, disclosed last month plans to cut around 10% of its roles. At the same time, AI platforms from companies such as Anthropic are being viewed as potential existential threats to traditional software providers, a dynamic that has pressured share prices across a range of firms from smaller names to larger rivals including Salesforce and ServiceNow. Freshworks’ stock has fallen about 26% year-to-date.
Independent trackers of technology layoffs show this pattern extends beyond individual companies. Layoffs.fyi, a website that monitors global tech job cuts, reported that 92,462 employees have lost their jobs so far this year.
Alongside the workforce reduction, Freshworks provided financial guidance and recent results. For the second quarter, the company expects revenue in a range of $232 million to $235 million. The midpoint of that guidance sits above analysts’ average estimate of $232.7 million, based on data compiled by LSEG.
In the first quarter, Freshworks reported revenue of $228.6 million, a 16% increase from the comparable period, versus consensus estimates of $223.24 million. Adjusted profit for the quarter came in at $0.11 per share, missing the $0.12 per-share estimate.
Freshworks said the combination of AI-driven product changes, organizational realignment and the reinvestment plan for its Employee Experience unit underpin the rationale for the restructuring and the company’s near-term financial targets.
Context
- Layoffs tied to AI adoption and automation are occurring across the software sector.
- Freshworks plans to redeploy savings toward its Employee Experience product suite, including Freshservice.
- The company’s recent revenue growth and guidance sit alongside a modest earnings shortfall and a notable year-to-date stock decline.