Freshworks Cuts 11% Workforce Amid AI Shift

Freshworks is reducing its global workforce by approximately 500 employees, which constitutes 11% of its total staff, as the company navigates the significant impact of artificial intelligence on the software industry. This decision, announced on Tuesday, May 5, 2026, reflects a broader trend within the tech sector where companies are integrating AI and automation. CEO Dennis Woodside explained that AI's role in product development and engineering, alongside the automation of routine business operations, contributed to this restructuring. He noted that "over half of our code is written by AI," highlighting the efficiency gains. The company anticipates one-time charges of about $8 million for this initiative. Savings generated from integrating sales teams, streamlining management, and automation will be reinvested into Freshworks' Employee Experience business, particularly its IT service management software, Freshservice. This strategic reallocation aims to bolster growth in key areas. The company's stock had seen a decline of roughly 26% year-to-date prior to this announcement. Freshworks projected second-quarter revenue to fall between $232 million and $235 million, a range that edges above the average analyst estimate of $232.7 million. This positive revenue outlook was shared alongside first-quarter results that showed a 16% increase in revenue to $228.6 million, although adjusted profit of 11 cents per share slightly missed the 12-cent estimate.