Freshworks, the SaaS company known for its customer support and business solutions, has announced significant layoffs, impacting 660 employees, or 13% of its global workforce. This latest round of Freshworks layoffs marks a continuation of workforce reductions by the company over the past year as it aims to improve operational efficiency and focus on strategic growth areas.
In a letter to employees, CEO Dennis Woodside explained that the Freshworks layoffs are part of a restructuring plan designed to align the company’s talent with its strategic priorities in customer experience, employee experience, and artificial intelligence. The layoffs, which affect Freshworks employees worldwide, including in India, underscore a company-wide initiative to streamline operations and simplify team structures to optimize productivity.
The company estimates that the Freshworks layoffs will incur charges between $11 million and $13 million in the fourth quarter of 2024. These expenses primarily cover employee separation payments, benefits, and other related costs. Freshworks anticipates that the restructuring process, aimed at achieving cost efficiencies and growth, will be completed by the end of 2024.
Alongside the layoffs, Freshworks’ board of directors has authorized a $400 million share buyback program. Although details of the buyback have not been fully disclosed, the program demonstrates Freshworks’ focus on strengthening shareholder value amid its strategic restructuring.
Woodside, who took on the role of CEO five months ago, stated that one of his initial tasks was to assess the company’s strategy and focus on areas with the greatest growth potential. Following this assessment, Freshworks began realigning its workforce around core growth initiatives, prioritizing the company’s fastest-growing employee experience business, and combining teams dedicated to customer experience products, such as support, sales, and marketing.
The company, founded in 2010 and listed on NASDAQ, is working to solidify its market position amid challenging economic conditions and evolving tech demands. The Freshworks layoffs and organizational adjustments reflect the company’s efforts to remain agile and competitive in the dynamic SaaS industry.
