Freshworks, a software company based in India and the US, is reducing its workforce by approximately 9%—around 1,600 employees—as it integrates artificial intelligence (AI) into its products and operations. The layoffs impact various departments, with a disproportionate effect on roles involving repetitive tasks now automated by AI.
CEO Girish Mathrubootham communicated the decision to employees, citing a need to realign the company’s structure to capitalize on the opportunities presented by AI. He emphasized that the cuts weren’t due to financial difficulties; Freshworks remains profitable. Instead, the restructuring aims to accelerate AI adoption and improve efficiency.
The company is heavily investing in AI, particularly generative AI, to enhance its customer service, sales, and marketing platforms. This includes features like automated email responses, intelligent chatbots, and predictive analytics. Freshworks believes AI will fundamentally change how software is built and delivered, requiring a different skillset within the organization.
Affected employees will receive severance packages including salary continuation, outplacement services, and benefits continuation, varying based on tenure and location. The company is focusing on reskilling existing employees for roles focused on AI development and implementation.
This move reflects a broader trend within the software industry, where companies are leveraging AI to streamline operations and reduce reliance on manual labor. While Freshworks is profitable, the layoffs demonstrate a proactive approach to adapting to the changing technological landscape and maintaining a competitive edge. The company anticipates that AI will drive future growth and innovation, necessitating a workforce equipped to navigate this new era. Freshworks expects to reinvest the savings from the workforce reduction into AI initiatives.
