Freshworks To Cut 660 Jobs In Restructuring Exercise

Nasdaq-listed SaaS major Freshworks is cutting 13% of its global workforce as part of a restructuring plan to streamline operations and increase operational efficiency.

The job cuts will affect about 660 employees, Freshworks CEO Dennis Woodside told staff in an email on November 6.

The Chennai-based company expects to incur $11-13 Mn in restructuring costs in the fourth quarter of 2024, which will comprise severance payments, employee benefits and related expenses, the company said in a filing with the SEC.

These changes are expected to take effect by the end of the fiscal year, which concludes on December 31, 2024.

The layoffs are in line with the company’s strategy as the company shifts its focus to customer experience (CX) products, artificial intelligence, and employee experience business (EX).

“To add more focus on our EX, AI and CX priorities, we are realigning our global workforce, putting us on a path to have a bigger impact for our customers,” Woodside said in an email to employees.

The Freshworks CEO said the company is implementing these changes even as it is profitable and seeing increasing demand for its AI-powered products.

The move adds to signs that layoffs will continue this year, as companies leverage AI and automation to drive growth and reduce their workloads.

Fintech giant Paytm has eliminated hundreds of jobs in recent months that could be automated through AI processes. Earlier this year, IPO-bound adtech unicorn InMobi said it was revamping its operations by adopting AI, that would lead to 125 job cuts.

Freshworks managed to narrow its consolidated net loss by 3.5% year-on-year to $29.95 Mn in the third quarter of 2024 from $31.03 Mn in the year-ago period.

Total revenue jumped 21.4% to $186.6 Mn in the the quarter ended September 30, 2024, compared to $153.6 Mn in the same quarter last year, driven by increasing customer adoption of its AI-powered products.

Meanwhile, Freshworks said that its board has approved a share buyback program of up to $400 Mn of the company’s outstanding Class A common stock.