Freshworks, a leading software-as-a-service (SaaS) company, has announced a significant reduction in its global workforce by 13%, impacting approximately 660 employees.
This decision is part of a broader restructuring plan aimed at streamlining operations and aligning the company’s resources with its strategic priorities.
Freshworks: Restructuring for Efficiency
The restructuring plan, initiated in November 2024, is designed to better align the company’s talent with its strategic focus areas, which include Employee Experience (EX), Artificial Intelligence (AI), and Customer Experience (CX).
CEO Dennis Woodside, who took over the role in May 2024, emphasized the need to simplify the way the company operates and improve overall efficiency.
As part of the restructuring, Freshworks expects to incur charges of approximately $11 million to $13 million in the fourth quarter of 2024, primarily due to separation-related payments and employee benefits.
Despite these layoffs, Freshworks reported a 22% year-on-year increase in revenue to $186.6 million in the third quarter of 2024.
The company also announced a $400 million share buyback program approved by its board of directors.
This recent round of layoffs follows previous reductions in workforce in March, June, and December 2023.
Freshworks is not alone in this trend, as other tech giants like Google, Amazon, and Apple have also enacted job cuts this year despite reporting substantial earnings.
The tech industry’s shift towards AI, cost-efficiency, and economic recalibration has led to increased layoffs and restructuring efforts.
Focus on AI and Monetization and CEO’s Message
Despite the workforce reduction, Freshworks is making significant progress in its AI initiatives.
The company has monetized its AI products, Freddy Self-Service and Freddy Copilot, with paid copilot adoption growing by over 35% in the third quarter of 2024.
These AI products have helped customers achieve a reduction in resolution time and improve customer satisfaction.
In a message to the workforce, Woodside acknowledged the tough decisions that had to be made and assured employees that the restructuring is aimed at positioning the company for future growth.
He emphasized the importance of focusing on the most critical drivers of the business and ensuring that the company operates more efficiently.
Freshworks remains committed to its strategic priorities and aims to complete the restructuring plan by the end of the fiscal year on December 31, 2024.
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