Freshworks Trims Workforce For The Second Time In 3 Months

Nasdaq-listed enterprisetech major Freshworks has undertaken a fresh round of retrenchments at the company. This is the second round of layoffs at the startup in the past three months.

Without specifying the number of employees impacted in the exercise, Freshworks said that the move has been made to strengthen organisational and operational efficiencies. While the company did not overtly confirm the development, it did say that a ‘small number of individuals’ were impacted by the decision.

“Freshworks has not conducted org-wide layoffs and continues to hire for open positions. We continue to review organisational efficiencies to avoid duplicated efforts and maintain a strong performance culture. As a result, a small number of individuals are impacted and are leaving the company,” a Freshworks spokesperson said. 

This comes three months after Freshworks handed out pink slips to ‘less than 2%’ of its workforce, in December last year, amid an organisational reshuffle. Back then, an estimated 90 employees were impacted by the layoffs. 

Earlier this month, the SaaS unicorn also conceded that its cofounder and chief technology officer (CTO) Shanmugam Krishnasamy left the company way back in September 2022. The Nasdaq-listed startup had been operating without a CTO since then. 

The layoffs add another dimension to the spell of bad news that has plagued the startup recently. Freshworks’ annual losses soared 13% year-on-year (YoY) to $232.13 Mn in CY22 while an impending legal case is also gathering steam in the US.

The startup’s share prices have also been on a downward spiral. From a record high of $50.25 it clinched in October last year, Freshworks stock has fallen more than 71%. Freshworks closed at $14.17 on the Nasdaq on March 16. 

As if this was not enough, global inflationary pressures have also threatened homegrown enterprisetech giants as companies across the globe have reduced spending on SaaS products. As a result, revenues have been hit and many SaaS companies have been left with no choice but to raise prices amid a dwindling number of clients. 

This has especially hit Indian SaaS firms, many of which have undertaken layoffs at their respective companies. Recently, Indian enterprisetech startups such as Chargebee, Fareye and Icertis have fired employees as they look at cutting corners to stave off the funding winter.