- Freshworks cuts 11% of staff, around 500 global jobs.
- AI integration is driving significant workforce restructuring.
- Savings will be reinvested into Employee Experience business.
Freshworks has become the latest technology company to announce large-scale job cuts as artificial intelligence rapidly transforms the software industry.
The business software firm said it will reduce its workforce by 11 per cent, around 500 jobs globally, as companies increasingly automate routine work and redesign products around AI.
AI Moves From Tool to Workforce Driver
The California-based company, known for its customer service and tech support software, said the restructuring is closely tied to the growing use of AI across product development and internal operations.
Freshworks CEO Dennis Woodside told Reuters that artificial intelligence is already playing a major role inside the company.
“Over half of our code is written by AI,” Woodside said, adding that automation has significantly reduced repetitive work across the business.
Why Tech Firms Are Cutting Jobs
The Freshworks layoffs reflect a wider trend sweeping through the global software industry.
As companies invest heavily in AI capabilities, many are also trying to offset rising costs by streamlining teams, reducing management layers and automating functions previously handled by employees.
Last month, software company Atlassian also announced plans to cut roughly 10 per cent of its workforce.
At the same time, AI platforms developed by companies such as Anthropic are increasingly being viewed as potential long-term threats to traditional software businesses.
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Stock Market Reaction
Investors reacted sharply to the announcement. Shares of Freshworks fell more than 8 per cent in extended trading following the news. The company’s stock has already declined around 26 per cent this year.
Where the Savings Will Go
Freshworks said the savings generated from restructuring and automation will be redirected towards expanding its Employee Experience business.
This includes Freshservice, the company’s IT service management platform.
Woodside said the company plans to reinvest gains from merging sales teams, reducing layers of management and automating routine work into areas expected to drive future growth.
Layoffs Continue Across the Tech Industry
Job reductions linked to AI adoption have accelerated across the technology sector in 2026. According to Layoffs.fyi, a platform tracking global tech layoffs, around 92,462 employees have lost their jobs this year alone.
The latest Freshworks move adds to growing concerns over how automation and generative AI tools could reshape employment across white-collar industries.
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Revenue Outlook Still Beats Expectations
Despite the layoffs, Freshworks reported stronger-than-expected revenue guidance. The company expects second-quarter revenue between $232 million and $235 million, with the midpoint above analysts’ estimates of $232.7 million, according to LSEG data.
In the first quarter, revenue rose 16 per cent to $228.6 million, surpassing market expectations of $223.24 million. However, adjusted profit came in at 11 cents per share, slightly below estimates of 12 cents.
The Freshworks restructuring underlines a growing reality in the technology sector: AI is no longer just a productivity tool, it is beginning to reshape workforce structures and business models.
