Freshworks cuts 500 jobs, pivots product development toward AI
Freshworks will lay off approximately 500 employees-roughly 11% of its workforce-as the Nasdaq-listed software company restructures around AI-driven product development. The company expects the cuts to cost between $7 million and $9 million in the current quarter.
CEO Dennis Woodside said the restructuring redirects resources toward the employee experience (EX) business, which is growing at 27%, while making the customer experience (CX) division more profitable. The company is consolidating teams and shifting spending to align with these priorities.
The shift reflects how AI is changing product development itself. Woodside noted that more than half of Freshworks's new code now originates from AI tools. That efficiency gain is reducing the headcount needed to build products.
Freshworks reported first-quarter revenue of $228.6 million, up 16% from $196.3 million in the same period last year. The company posted a $8.1 million operating loss, representing a -3.5% operating margin.
For product development teams, the restructuring underscores a broader industry shift. Understanding AI for product development and generative code is becoming essential as companies reorganize around AI capabilities rather than traditional headcount models.
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