Freshworks cuts 500 jobs to shift focus toward AI-driven product development
Freshworks will lay off approximately 500 employees-11% of its workforce-as part of a restructuring plan to invest more heavily in AI-focused product development, the Nasdaq-listed software company said in regulatory filings.
The company expects the reduction to generate between $7 million and $9 million in charges during the upcoming quarter. CEO Dennis Woodside said the restructuring allows Freshworks to rebalance teams toward its employee experience business, which is growing at 27%, while running its customer experience business for profitability.
AI now drives product development decisions
Woodside highlighted a shift in how the company builds software. "Over half of our code originated in AI today, and that is changing how we build products and the number of people that we need," he said on an analyst call.
The restructuring reflects broader changes in product development workflows. As generative code becomes standard practice, companies are adjusting team structures and hiring needs.
Revenue grows despite operational losses
Freshworks reported first-quarter 2026 revenue of $228.6 million, up 16% from $196.3 million in the same period last year. The company posted an operating loss of $8.1 million, representing a -3.5% operating margin.
Woodside said the company is prioritizing sustainable growth and increased profitability for shareholders and customers.
For product development professionals, understanding how AI for product development reshapes team composition and workflows is becoming essential as more organizations follow similar restructuring paths.
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