Freshworks has laid off around 500 employees, roughly 11% of its global workforce, as the Nasdaq-listed software company restructures around artificial intelligence. The decision was communicated to staff on May 6, 2026, with affected employees in India and North America notified by their managers within 30 minutes of the internal announcement. Employees in other geographies will be informed in line with local employment regulations.
The Chennai-rooted SaaS firm employed about 4,500 people as of December 31, 2025. In a letter to staff, Chief Executive Officer Dennis Woodside framed the cuts as a structural shift rather than a cost reaction. He told employees the company was realigning its workforce to move faster in the AI era and concentrate resources on its strongest growth lines, including the Freshservice IT service management product and the Employee Experience business.
In an interview with Reuters published on May 7, Woodside said the role of AI inside Freshworks had moved well beyond pilot projects. He said over half of the company’s code is now written by AI tools, and that automation had eliminated significant volumes of repetitive work across functions. Freshworks pegged one-time restructuring charges at around USD 8 million.
The company posted first-quarter revenue of USD 228.6 million, a 16% year-on-year rise, and projected second-quarter revenue between USD 232 million and USD 235 million. Affected employees will receive severance pay linked to tenure, first-quarter bonuses, extended healthcare cover, support through the Employee Assistance Programme, and career placement services, the company said in its filing.
This is the second large layoff round at Freshworks in under two years. The company let go of about 660 employees, or roughly 13% of its workforce, in November 2024 under a similar AI-led efficiency push. It also marks the second profitable Indian-origin SaaS firm to cite AI directly as the cause of layoffs in 2026, following a broader pattern across the global software industry. Atlassian announced cuts of around 10% of its workforce earlier this year, while Cognizant’s Project Leap programme is expected to affect 12,000 to 15,000 roles, with the bulk in India.
