Layoffs · Enterprise Software & IT

Freshworks cuts 500 staff and posts Q1 results

What they do

Freshworks provides software tools to help businesses manage customer support and internal employee services

The company laid off 500 employees globally and expects $8 million in one-time restructuring charges

Revenue grew 16% to $228.6 million while the company raised its full-year financial guidance

Freshworks laid off 500 employees representing 11% of its global workforce on May 6.
The company announced these cuts alongside its Q1 FY26 financial results released on the same day.
Freshworks expects $8 million in one-time restructuring charges, with most costs recognized in Q2 FY26.
The layoffs impact operations in both India and the United States.
This follows a previous round of job cuts in November 2024 that reduced the workforce by 13%.
The company aims to deploy savings from this restructuring into its Employee Experience vertical.
CEO Dennis Woodside stated the shift supports growth in the EX segment including Freshservice.
Stock price rose approximately 2% to around $0.19 following the announcement.

The move signals a strategic rebalancing towards higher-growth areas like Employee Experience.
It continues a cost-cutting trend initiated in late 2024 to improve operational efficiency.
The company is prioritizing AI-driven product adoption to drive future revenue growth.
Restructuring allows reallocation of resources to key verticals despite overall revenue growth.

Freshworks offers software solutions for customer engagement and IT service management.
Its products include Freshdesk for customer support and Freshservice for IT operations.
The company focuses heavily on integrating Freddy AI Copilot into its suite of tools.
Over 50% of code generated within its ecosystem is now produced by AI tools.
AI attach rates on new deals exceeding $30k ARR are above 65%.
The company targets large enterprise clients with contracts growing significantly in size.
Two of the largest deals in company history were secured during Q1 FY26.
Freshworks serves customers across various industries through its cloud-based platforms.
The business model relies on subscription revenues from its SaaS products.