Freshworks to Lay Off 500 Employees, Incurs $8 Million Restructuring Charge

Freshworks Inc. Announces Restructuring, Cuts 11% of Global Workforce

Nasdaq-listed Freshworks Inc. has announced plans to reduce its global workforce by approximately 11% or around 500 jobs as part of a restructuring exercise. The layoffs are expected to impact both the company's India and US operations. This move comes as SaaS companies globally face pressure on growth and profitability.

The company expects to incur one-time restructuring charges of around $8 million, with the bulk of these charges to be recognized in the second quarter of 2026. This was disclosed by Tyler Sloat, Freshworks' Chief Financial Officer (CFO), during the company's Q1 earnings call on May 6.

As part of its restructuring efforts, Freshworks aims to consolidate overlapping go-to-market efforts, streamline its product development process, and apply AI and automation across its business. These actions are expected to enable the company to focus on its momentum in EX and accelerate Freshworks' competitiveness. The company has updated its guidance for the quarter and full year to incorporate the financial impact of these actions.

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Freshworks' shares on Nasdaq rose about 2% on the day of the results, trading at around $0.19 a piece. However, the stock remains down roughly 26% year-to-date. This marks the third round of layoffs at Freshworks in recent years, highlighting ongoing efforts to control costs amid a shifting demand environment for software companies.

The company has more than 5,000 employees on roll and has conducted multiple rounds of layoffs and management rejig since 2024. The latest restructuring announcement follows the appointment of Dennis Woodside as the company's President in September 2022.

In a separate development, the company reported a slight improvement in customer retention metrics. Net dollar retention stood at 106% on a reported basis and 105% on a constant currency basis in Q1, marking a one percentage point increase from the previous quarter. In the first quarter of 2026, Freshworks reported a 16% year-on-year increase in revenue to $228.6 million, while narrowing its GAAP operating loss to $8.1 million from $10.4 million a year ago.

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The move reflects broader trends across the SaaS sector, where companies are tightening costs and recalibrating hiring as spending slows and focus shifts toward profitability. Other SaaS firms, such as SuperOps, have also undertaken layoffs in recent months as companies tighten spending and focus on profitability.