Freshworks Inc will trim about 11% of its global workforce, impacting around 500 employees, as part of its latest restructuring exercise. This marks the third round of layoffs in recent years and the second since Dennis Woodside took over as chief executive of the Chennai-based Software-as-a-Service (SaaS) firm in May last year.
Freshworks CFO Tyler Sloat said the company has announced operational changes to consolidate overlapping organisational efforts, streamline its product development process, and increase the use of AI and automation across the business.
Freshworks Chief Executive and President Woodside said the restructuring, which will be taken up in the second quarter, is aimed at consolidating overlapping go-to-market efforts, streamlining product development, and applying AI and automation across the business.
Woodside stated that the layoffs are driven by the need to operate differently in the ‘AI era’ and the rapid adoption of artificial intelligence in software development. He noted that AI has significantly changed operations, stating that over half of their code is written by AI. The restructuring is aimed at reducing ‘rote work,’ merging sales teams, and streamlining management layers
“Over half of our code is originated in AI today….that is definitely changing the amount of people we need to build product,” Freshworks CEO said in a public statement. “While our business is performing well, the pace of the AI era and recent internal changes have changed how we need to operate. This realignment is about ensuring every Freshworks employee is focused on solving the most important problems and driving our growth strategy forward,” he added.
The other reason is restructuring the sales team to focus on EX, or IT service management biz (Freshservice), which is growing at 27% YoY. This will account for 60% of revenues by year’s end.
“As a result of these actions, we are reducing our global headcount by approximately 11%. We anticipate taking one-time restructuring charges of approximately $8 million, with the vast majority in Q2,” Sloat said during the company’s first quarter earnings call on Wednesday.
“These actions enable us to focus energy on our momentum in EX and accelerate Freshworks’ competitiveness,” Woodside. EX refers to the Employee Experience business of Freshworks, which was a key revenue growth driver, expanding 27% year-on-year.
Freshworks has a workforce of more than 5,000 employees across India and the US, with the layoffs expected to impact both geographies. This marks the third round of layoffs at Freshworks in recent years, underscoring a broader shift among SaaS firms to control costs and factor in the impact of artificial intelligence.
In November 2025, Freshworks announced a 13% reduction in its global workforce, impacting around 660 employees, aimed at improving operational efficiency. This was the first such move since Dennis Woodside took charge as chief executive in May 2024. Earlier, in 2023, the Nasdaq-listed company laid off 114 employees in March, followed by another round of about 90–100 job cuts in June that year.
Woodside, a former Dropbox executive, was appointed President of Freshworks in September 2022. In May 2024, founder Girish Mathrubootham transitioned to the role of Executive Chairman, with Woodside taking over as CEO as part of a major organisational rejig.
Last September, Mathrubootham stepped down as Executive Chairman to focus full-time on Together Fund, the venture capital firm he co-founded, marking the end of his journey with the company he built from a one-room startup in Chennai into a Nasdaq-listed, multi-billion-dollar SaaS firm.
Meanwhile, Freshworks beat its own revenue estimates for the quarter ended March 2026 (Q1), reporting a 14% growth in revenue on a constant currency basis at $228.6 million, compared to $196.2 million in the same quarter last year. GAAP loss from operations stood at $8.1 million versus $10.4 million loss in the first quarter of 2025.
“Freshworks began Q1 with strong momentum, building on our 2025 successes and achieving our sixth straight quarter of exceeding expectations,” Woodside said, adding that demand for its EX platform and AI Copilot offerings continued to drive expansion. On a sequential basis, the GAAP loss was steep compared to GAAP operating profit of $39.7 million in Q4 2025.
The number of customers contributing more than $100,000 in ARR was 1,646, an increase of 29% year-over-year and 26% adjusting for constant currency. Freshworks expects Q2 2026 revenue between $232 million and $235 million and raised its full-year revenue guidance to $958–$964 million, representing 14%-15% growth.
