Freshworks layoffs will cut about 500 jobs as AI reduces routine work. The move follows revenue growth but margin pressure, reflecting a broader trend of tech workforce restructuring.
Key Highlights
- Freshworks layoffs to impact about 500 employees as AI reduces routine roles
- AI now generates more than half of company code, improving productivity levels
- Q1 2026 revenue rose 16% to $228.6 million despite margin pressure
- Over 92,000 tech layoffs recorded globally in 2026, reflecting AI-driven restructuring
Freshworks layoffs will affect about 11% of its global workforce, or roughly 500 employees, as the company increases its use of artificial intelligence in coding and operations.
The decision reflects a broader shift among software firms as they adjust staffing as automation expands.
The company said AI now generates more than half of its code, reducing reliance on routine engineering and support roles.
The Freshworks layoffs come as part of restructuring aimed at aligning costs with changing operational needs.
AI takes over routine work
Freshworks said automation tools are handling repetitive internal tasks, allowing teams to deliver work faster with fewer resources. This shift has directly contributed to the Freshworks layoffs, particularly in roles tied to manual processes.
The company expects to record about $8 million in restructuring costs linked to the job cuts. Its workforce stood at around 4,500 employees as of late 2025, spread across multiple regions.
Growth continues, margins under watch
Freshworks reported first-quarter 2026 revenue of $228.6 million, up 16% year-on-year. However, earnings fell short of expectations, increasing pressure to manage costs alongside growth.
It has projected second-quarter revenue between $232 million and $235 million. Shares have declined about 26% so far this year, reflecting investor caution around profitability and ongoing restructuring, including the Freshworks layoffs.
Wider tech layoffs trend
The Freshworks layoffs come amid continued workforce reductions across the technology sector. Data cited by Reuters shows more than 92,000 tech jobs have been cut globally in 2026 as companies invest more in AI and streamline operations.
Other software firms have taken similar steps. Earlier, Atlassian reduced its workforce by about 10%, pointing to a broader industry pattern in which automation is reshaping hiring needs.
Freshworks said savings from the layoffs will be redirected toward product development and AI-focused initiatives. The Freshworks layoffs highlight how companies are rebalancing teams as software development and customer support become more automated.
FAQs
Q1. Why are Freshworks layoffs happening?
The layoffs are driven by increased AI use, which is reducing the need for routine roles.
Q2. How many employees are affected by Freshworks layoffs?
Around 500 employees, or about 11% of the global workforce, are impacted.
Q3. What role is AI playing in Freshworks layoffs?
AI is generating over half of the company’s code and automating repetitive tasks.
Q4. Are Freshworks layoffs part of a wider trend?
Yes, several tech firms are cutting jobs as AI reshapes workforce needs and operations.
Follow Inspirepreneur Magazine for daily global business news.
