Freshworks, the Nasdaq-listed software-as-a-service (SaaS) company, has announced a significant reduction in its workforce by 13%, impacting approximately 660 employees globally. This move is part of the company’s broader restructuring efforts aimed at streamlining operations and aligning talent with its strategic priorities. The layoffs will affect employees across multiple locations, including the US, India, and other global offices.
In a letter to employees, CEO Dennis Woodside explained that this restructuring plan, which began in November 2024, is designed to enhance operational efficiency and refocus the company on its key business drivers—employee experience (EX), artificial intelligence (AI), and customer experience (CX). The company expects to incur costs of approximately $11 million to $13 million in the fourth quarter of 2024 due to separation-related payments and other expenses associated with the layoffs.
Woodside emphasized that these changes were part of a strategic review initiated when he took over as CEO in May 2024, following the departure of founder Girish Mathrubootham. The company is shifting its focus toward faster-growing areas, particularly its EX business, while also reallocating resources to strengthen its AI and CX offerings. This restructuring plan is expected to be completed by the end of the fiscal year on December 31, 2024.
The company’s latest quarterly earnings report for Q3 2024 highlighted a 22% increase in revenue, reaching $186.6 million, compared to $153.6 million in the same quarter of 2023. Freshworks projects Q4 revenue between $187.8 million and $190.8 million, marking a 20% growth for the full year. Despite the layoffs, the company has seen positive financial growth and a narrowing of its net loss to $30 million from $31 million year-over-year.
Freshworks, which started in Chennai in 2010, continues to serve a broad customer base, including major companies like American Express, Bridgestone, and Sony. The company’s strategic focus moving forward will be on improving efficiency and driving growth in its EX, AI, and CX businesses, despite the workforce reduction.
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