Business-software company Freshworks announced Tuesday it will cut 11 percent of its workforce - roughly 500 jobs - as the rapid advancement of AI continues to disrupt the industry. Shares fell more than 8 percent in extended trading.
The cuts join a wave of AI-related layoffs in the software sector. Peer Atlassian slashed about 10 percent of its workforce last month, while tools from Anthropic and others threaten traditional players like Salesforce and ServiceNow.
Freshworks CEO Dennis Woodside told Reuters the decision was driven partly by AI use in product and engineering. "Over half of our code is written by AI," Woodside said, adding that automation had reduced "rote work that technology can take care of."
The restructuring will affect departments globally and is expected to cost about $8 million in one-time charges. The company had roughly 4,500 full-time employees as of December 31, 2025. Savings from merging sales teams and reducing management layers will be reinvested in Freshworks' Employee Experience business, including its IT service management software Freshservice.
Freshworks expects second-quarter revenue between $232 million and $235 million, slightly above analysts' average estimate of $232.7 million. First-quarter revenue rose 16 percent to $228.6 million, beating estimates of $223.24 million. Adjusted profit of 11 cents per share missed estimates of 12 cents.