Freshworks on Wednesday said it would slash 11% of its workforce, or about 500 jobs, as the business-software company looks to navigate industry-wide disruptions triggered by rapid advancement in artificial intelligence (AI). Post the announcement, shares of the company, which makes software for customer service and technology support, fell more than 8% in extended trading on NASDAQ.
Freshworks chief executive Dennis Woodside told Reuters the decision was partly driven by the use of AI in product and engineering teams, along with automation of routine work across the company. "Over half of our code is written by AI," Woodside said, adding automation had reduced "rote work that technology can take care of."
The restructuring will affect departments globally, the company said. Freshworks expects one-time charges of about $8 million. The company had about 4,500 full-time employees as of Dec. 31, 2025.
Woodside said savings from merging sales teams, reducing management layers and automating work would be reinvested in Freshworks' Employee Experience business, which includes its IT service management software Freshservice.
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Job Cuts In AI
The job cuts are the latest in the software industry linked to AI as companies move to automate work, redesign products around the technology and manage its high costs. Freshworks' peer Atlassian said last month it would cut about 10% of its workforce.
AI tools from companies such as Anthropic have also emerged as a major challenge for traditional software firms, weighing on shares of companies including Freshworks and larger rivals such as Salesforce and ServiceNow.
According to Layoffs.fyi, a website that tracks technology job cuts globally, 92,462 employees have lost their jobs in the sector this year.
Separately, Freshworks forecast second-quarter revenue between $232 million and $235 million. The midpoint of the range was above analysts' average estimate of $232.7 million, according to data compiled by LSEG.
In the first quarter, Freshworks' revenue rose 16% to $228.6 million, beating estimates of $223.24 million. The adjusted profit stood at 11 cents per share, below analysts' expectations of 12 cents, as reported by Reuters.
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