Freshworks to cut 11% jobs as AI reshapes software sector
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May 5 : Freshworks said on Tuesday it would cut 11 per cent of its workforce, or about 500 jobs, as the business-software company grapples with an industry being reshaped by artificial intelligence.
The cuts are the latest tied to AI in the software sector as companies race to automate work and reshape products around the technology while trying to offset its steep costs. Peer Atlassian, last month, said it would slash roughly 10 per cent of jobs.
At the same time, AI tools from the likes of Anthropic are seen as potential existential threats to traditional software makers, hammering shares of companies ranging from Freshworks to larger rivals such as Salesforce and ServiceNow.
The San Mateo, California-based company's stock has declined about 26 per cent this year.
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CEO Dennis Woodside told Reuters the decision was driven partly by AI use in product and engineering, as well as automation of routine work across the business.
"Over half of our code is written by AI," Woodside said, adding that automation had reduced "rote work that technology can take care of."
Freshworks said the restructuring would affect about 500 roles across departments globally and incur one-time charges of about $8 million. As of December 31, 2025, it had about 4,500 full-time employees.
Woodside said savings from merging sales teams, reducing management layers and automating work would be reinvested in Freshworks' Employee Experience business, which includes its IT service management software Freshservice.
Layoffs.fyi, a website that tracks tech job cuts around the world, reported that 92,462 employees have lost their jobs this year.
Separately, Freshworks said it expects second-quarter revenue between $232 million and $235 million, the midpoint of which is above analysts' average estimate of $232.7 million, according to data compiled by LSEG.
In the first quarter, revenue rose 16 per cent to $228.6 million, compared with estimates of $223.24 million. Adjusted profit came in at 11 cents per share, missing estimates of 12 cents per share.
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