SUMMARY
CEO Girish Mathrubootham is said to have conveyed the announcement to employees at a town hall a few months ago
Freshworks’ chief product officer Prakash Ramamurthy has been entrusted with the outgoing CTO’s responsibilities
Freshworks saw its annual losses balloon to $232.13 Mn in CY22 against a revenue of $498 Mn in the same period
In a major management overhaul at SaaS giant Freshworks, cofounder and chief technology officer (CTO) Shanmugam Krishnasamy has left the company. The Nasdaq-listed startup has been operating without a CTO incharge for the past many months.
“After 11 years of working hard and helping build Freshworks products and technology, Shan decided to take a career break in September 2022. His former responsibilities are held by CPO Prakash Ramamurthy who leads both product and engineering teams,” said a Freshworks spokesperson.
Fellow cofounder and CEO Girish Mathrubootham is said to have conveyed the announcement to employees at a town hall three to four months ago. “This was announced in one of the all-hands around 3-4 months ago. Girish invited Shan on stage and said that Shan was leaving,” a source was quoted as saying by YourStory, which reported the development first.
Meanwhile, Freshworks’ chief product officer (CPO) Prakash Ramamurthy has been entrusted with the outgoing CTO’s responsibilities, and handles both product and engineering teams. Curiously, Dennis Woodside joined the SaaS major as the president in September last year and has been tasked with handling the day-to-day responsibilities of the company.
So far, there has been no clarity on whether the SaaS unicorn has been looking for a CTO replacement or what Krishnasamy’s next steps are going to be.
This is one of the biggest administrative developments that appears to have occurred at the company since the mega management overhaul of 2021, right before the company went public. Back then, it onboarded big names such as former Zuora executive Tyler Sloat as CFO and ex-ServiceMax executive Stacey Epstein as chief marketing officer.
In Uncharted Waters
The reports of Krishnasamy’s exit comes at a time when the SaaS unicorn has been bogged down by multiple challenges from mounting losses to legal troubles. Freshworks saw its annual losses balloon 13% year-on-year (YoY) to $232.13 Mn in the calendar year 2022 (CY22), up from $204.8 Mn reported in CY21.
While its revenues hovered very close to the $500 Mn-mark, the startup has also been plagued by mass layoffs at the company. It sacked ‘less than 2%’ of its workforce’, or around 90 employees, in December last year as part of a supposed organisational reshuffle.
But, one of the biggest issues stems from a potential lawsuit that allegedly claims that the SaaS player deliberately misled the investors and did not reveal the full extent of challenges faced by its business during the IPO proceedings.
The company has also been hit by global macroeconomic pressures that have forced companies across the world to cut corners, which have directly hit spending on SaaS products. While there has been no visible effect of the same on its revenue numbers, Freshworks’ share prices have also taken a massive blow in the past one year.
While the stock has stabilised this year so far, Freshworks’ share prices have tanked by more than 69% from its record high of $50.25 in October last year, wiping off billions of dollars in investor wealth.
As per latest data, Freshworks’ stock closed 0.51% lower at INR $15.51 on Nasdaq on Tuesday (March 7).
