Freshworks to cut 11% jobs as AI reshapes software industry

[BENGALURU] Freshworks said on Tuesday (May 5) that it would cut 11 per cent of its workforce, or about 500 jobs, as the business-software company navigates the industrywide disruptions caused by the rapid advances in artificial intelligence.

Shares of the company, which makes software that manages customer service and tech support, were down more than 8 per cent in extended trading.

The cuts are the latest tied to AI in the software business, as companies race to automate work and reshape products around the technology while trying to offset its steep costs. Peer Atlassian last month said that it would slash roughly 10 per cent of jobs.

At the same time, AI tools from Anthropic and others have emerged as potential existential threats to traditional software makers, hammering shares of companies ranging from Freshworks to larger rivals such as Salesforce and ServiceNow.

San Mateo, California-based Freshworks’ stock had declined about 26 per cent this year.

CEO Dennis Woodside said the decision was driven partly by AI use in product and engineering, as well as automation of routine work across the business.

“Over half of our code is written by AI,” Woodside said, adding that automation had reduced “rote work that technology can take care of”.

The restructuring will affect departments globally, the company said, and it estimated one-time charges of about US$8 million. The company had about 4,500 full-time employees as at Dec 31, 2025.

Woodside said that the 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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Layoffs.fyi, a website that tracks tech job cuts around the world, reported that 92,462 employees have lost their jobs this year.

Separately, Freshworks said that it expects second-quarter revenue between US$232 million and US$235 million, the midpoint of which is above analysts’ average estimate of US$232.7 million, according to data compiled by LSEG.

In the first quarter, revenue rose 16 per cent to US$228.6 million, compared with estimates of US$223.24 million. Adjusted profit came in at 11 US cents per share, missing estimates of 12 US cents. REUTERS