Nasdaq listed SaaS firm Freshworks has laid off around 500 employees, or nearly 11% of its global workforce, as it restructures operations amid the growing adoption of artificial intelligence across the software industry.
The layoffs, which will impact teams globally, are expected to result in one-time restructuring costs of approximately $8 million. As of December 31, 2025, the company had around 4,500 employees.
CEO Dennis Woodside said the decision was partly driven by the company’s increasing reliance on AI in product development and internal workflows. According to him, more than half of Freshworks’ code is now generated using AI tools, significantly reducing development timelines and manual workloads.
The company has also realigned its strategy, shifting focus toward its Employee Experience (EX) business, particularly its IT service management platform, Freshservice. Woodside noted that Freshworks has consolidated its go-to-market approach and rebalanced teams to support this transition.
Savings from the layoffs will be reinvested into AI capabilities and the EX vertical, as the company looks to drive efficiency and accelerate growth in enterprise focused solutions.
This marks Freshworks’ second major round of layoffs in under two years. In November 2024, the company had reduced its workforce by about 660 employees as part of a similar restructuring effort centred on operational efficiency and AI adoption.
Despite the workforce reduction, Freshworks reported strong financial performance. Revenue for Q1 2026 grew 16% year-on-year to $228.6 million, surpassing analyst expectations. The company has guided for Q2 revenue between $232 million and $235 million, indicating ontinued momentum.
The move reflects a broader trend across the tech industry, where companies are leveraging AI to automate workflows, reduce costs, and reshape workforce structures.
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