Software-as-a-service firm Freshworks is laying off around 500 employees globally, or nearly 11 per cent of its workforce, as the company restructures operations amid a stronger push toward AI.
In an internal letter to employees on May 6, CEO Dennis Woodside wrote: “Today, I have some difficult news to share. To accelerate our biggest growth drivers and move faster in the AI era, we are realigning our global workforce.”
“As a result, we are reducing our global workforce by approximately 11% (~500 employees). We did not make this decision lightly as this means we will be saying goodbye to many talented colleagues and friends,” he added.
Which employees are impacted?
The company said employees in North America and India would receive emails from their management leaders within 30 minutes clarifying whether their positions had been impacted.
“Due to country-specific regulations, employees in all other regions will be contacted over the coming days in accordance with local practices,” the letter said.
Freshworks did not specify which teams or functions were impacted by the layoffs.
Why is Freshworks cutting jobs?
Explaining the rationale behind the move, Woodside said: “We have strong momentum executing on our strategy: Employee Experience (EX) is growing rapidly as we move upmarket, over half of large deals now include AI, and more than 80% of our Customer Experience (CX) customers have upgraded to our unified Freshdesk Omni.”
“While our business is performing well, the pace of the AI era and recent internal changes have changed how we need to operate,” he wrote.
The CEO added that the company was “realigning” its organisation around a few outcomes, though specific restructuring details were not disclosed in the letter.
What support will impacted employees receive?
The company also detailed support measures for affected employees.
“We are committed to supporting our departing colleagues with care and respect,” Woodside said in the letter.
“All departing team members are eligible to receive severance pay based on tenure, Q1 bonuses, extended healthcare coverage, extended EAP (Employee Assistance Program) access through Spring Health, and career services and job placement support,” he added.
Addressing affected employees directly, Woodside wrote: “If we are saying goodbye to you: I am deeply grateful for your contributions and the mark you’ve made on Freshworks. Thank you for championing our customers, partners and each other. You will always be a valued part of our story and our extended community.”
What did the CEO say about Freshworks’ future?
On the company’s future direction, the CEO said: “This realignment is about ensuring every Freshworks employee is focused on solving the most important problems and driving our growth strategy forward.”
“While our structure is changing, our mission and strategy remain the same. We are uniquely positioned to continue growing across EX, AI and CX and have an even greater impact on our customers and industry,” he added.