Freshworks has decided to cut around 500 roles globally—about 11% of its workforce—driven by increased automation linked to advances in AI. The company has cited rapid advances in artificial intelligence (AI) as one of the primary reasons behind these layoffs. The layoffs are expected to impact both its India and US operations.

The company’s CEO, Dennis Woodside, said the job cuts were partly a result of growing use of AI in product development and engineering, along with increased automation of everyday tasks across the business. “Over half of our code is written by AI,” Woodside told Reuters. 

Woodside said the company plans to channel the cost savings from combining sales teams, cutting down management layers, and automating routine work back into Freshworks’ Employee Experience division. This segment includes its IT service management platform, Freshservice.

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Freshworks provides tools for customer relationship management, IT service management and e-commerce marketing. Freshworks was even one of the first Indian SaaS companies to be listed on the Nasdaq stock exchange. The Software-as-a-Service (SaaS) company was founded in Chennai, Tamil Nadu in 2010. 

Importantly, this announcement from Freshwork comes at a time when the tech sector is grappling with layoffs in the US and around the world, including India.

AI-enforced cost-cutting worth $8 million: 

As of 31 December 2025, the company had nearly 4,500 full-time employees. The restructuring is expected to cost the firm one-time charges of about $8 million. The bulk of the restructuring costs will be recognised in Q2 of 2026, Freshwork’s CFO, Tyler Sloat, said during the company’s Q1 earnings call on 6 May.

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Layoffs in the tech industry have continued to climb in 2026: 

Layoffs in the tech industry have continued to climb in 2026, with more than 93,200 employees losing their jobs so far this year, according to layoffs.fyi, which tracks workforce reductions in real time. In comparison, the total number of tech layoffs for all of 2025 stood at 124,201.

On a separate note, Freshworks shared its outlook for the second quarter, expecting revenue to fall between $232 million and $235 million. This projection slightly edges past analysts’ average estimate of $232.7 million, based on LSEG data.

For the first quarter, the company reported a 16% increase in revenue, reaching $228.6 million and beating expectations of $223.24 million. However, its adjusted earnings came in at 11 cents per share, falling just short of the 12 cents analysts had anticipated.