Freshworks to lay off 660 employees as part of global restructuring plan

Freshworks is reducing its workforce by 13 per cent to enhance operational efficiency and focus on key strategic priorities

Freshworks, the Nasdaq-listed software-as-a-service (SaaS) provider, is reducing its workforce by 13 per cent, impacting approximately 660 employees across various global locations, including India.

 

This decision is part of a broader strategy to streamline the company's operations and align its resources with strategic priorities.

 

CEO Dennis Woodside shared the news in a letter to employees, noting that the company currently employs more than 5,000 people worldwide. The layoffs will affect teams in the US, India, and other locations.

Strategic restructuring

As part of its restructuring plan, Freshworks expects to incur charges of approximately $11 million to $13 million in Q4 2024, mainly attributed to separation-related payments and employee benefits. The company aims to complete this restructuring by the end of the financial year on December 31, 2024.

 

Woodside emphasised that the restructuring would better align the company’s talent with its strategic focus areas, which include employee experience (EX), AI, and customer experience (CX). The realignment is also designed to improve operating efficiency, following a comprehensive assessment of the company's strategy that began with Woodside's appointment as CEO in May 2024.

Previous layoffs

This marks the latest in a series of layoffs at Freshworks. The company had previously reduced its headcount in March and June 2023, and had also laid off 90 employees in December 2022, including about 60 from its India team. In his letter, Woodside explained that these decisions were carefully considered to ensure the company is better positioned for the future.

$400 million share buyback announced

Alongside the workforce reductions, Freshworks' board of directors approved a $400 million share buyback programme. However, the company has not yet disclosed a timeline for this initiative.

Future strategy

Freshworks has made significant progress in improving operating efficiency, narrowing its net loss to $30 million in Q3 2024 from $ 31 million in the same period last year. CFO Tyler Sloat highlighted the company’s focus on driving non-GAAP operating income and generating free cash flow. He also noted that technical resources were shifted to support the EX business as part of the ongoing strategic review process.

 

(With agency inputs)