Freshworks Inc. has announced a significant restructuring exercise that will result in the reduction of approximately 500 jobs globally, representing nearly 11% of its workforce. The move comes as the SaaS company accelerates its shift toward artificial intelligence-led operations and streamlines its organisational structure to improve efficiency.
According to the company, the layoffs will impact employees across both India and the United States. Freshworks said the restructuring is aimed at consolidating overlapping go-to-market functions, simplifying product development workflows, and expanding the use of AI and automation across business processes.
The company has estimated a one-time restructuring charge of around $8 million, which is expected to be largely accounted for in the second quarter of fiscal year 2026. The financial impact of the workforce reduction has already been factored into its updated quarterly and annual guidance.
Freshworks leadership indicated that the restructuring is part of a broader strategy to strengthen its Employee Experience (EX) segment, which includes offerings such as Freshservice. The company aims to redirect resources toward higher-growth areas while reducing managerial layers and automating routine tasks.
CEO Dennis Woodside has previously highlighted that artificial intelligence is already playing a major role in the company’s engineering operations, with over half of Freshworks’ code reportedly being generated using AI tools. This increasing reliance on automation has contributed to a reassessment of workforce requirements across functions.
Despite the layoffs, Freshworks reported a strong financial performance in the first quarter of 2026, with revenue rising 16% year-on-year to $228.6 million. The company also noted improvements in customer retention metrics, although profitability trends showed some sequential pressure compared to the previous quarter.
