Freshworks cuts 500 jobs as AI reshapes software development
Freshworks will eliminate roughly 11% of its workforce-about 500 employees-as the software company automates product development and business operations. The San Mateo, California-based firm announced the restructuring on Tuesday, making it one of several major software vendors to tie job cuts directly to AI adoption.
The company's stock fell more than 8% in extended trading following the announcement.
AI already writing most of the code
Chief executive Dennis Woodside told Reuters that AI has become embedded throughout Freshworks' engineering process. "Over half of our code is written by AI," he said, noting that automation has eliminated "rote work that technology can take care of."
The restructuring will consolidate sales teams, reduce management layers, and increase operational automation. Freshworks expects to save approximately $8 million in one-time restructuring charges.
The company employed around 4,500 full-time staff as of December 31, 2025.
A broader shift across software
Freshworks is not alone. Atlassian announced plans last month to cut roughly 10% of its workforce as the sector adjusts to similar pressures. Across the technology industry, companies are automating coding, support functions, and operational workflows while redirecting investment into AI-focused products.
Larger vendors including Salesforce and ServiceNow have faced investor scrutiny over how generative AI tools could automate functions historically handled through enterprise applications. Technologies from companies like Anthropic are increasingly viewed as competitive threats to established software vendors.
According to Layoffs.fyi, more than 92,000 technology sector employees globally have lost jobs so far in 2026.
Revenue growth continues despite cuts
Freshworks reported first-quarter revenue of $228.6 million, a 16% year-over-year increase that exceeded analyst expectations. The company forecast second-quarter revenue between $232 million and $235 million, with the midpoint exceeding analyst estimates.
Adjusted earnings came in at 11 cents per share, slightly below analyst estimates of 12 cents.
Woodside said the company plans to reinvest savings into its Employee Experience division, including its IT service management platform, Freshservice.
Freshworks' shares have declined around 26% this year amid broader investor concerns about how AI could reshape enterprise software economics. The restructuring suggests the company is attempting to balance cost control with continued investment in AI-enabled growth areas as software companies rethink workforce structures and product development strategies.
For product development teams, understanding how AI for Product Development is reshaping industry practices-and how companies are integrating AI Coding Courses into their workflows-has become essential to staying competitive in this shifting market.
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