Freshworks is laying off around 11 per cent of its global workforce in a fresh restructuring move tied to operational changes and growing use of artificial intelligence across the business. Multiple reports estimate the reduction will impact nearly 660 employees worldwide.
The development comes even as the company continues to post revenue growth. Freshworks reported first-quarter revenue of $228.6 million for FY2026, marking a 16 per cent year-on-year increase. The company also expects to incur restructuring costs of around $7 million to $9 million as part of the exercise.
Reports indicate that AI adoption has become central to the company’s evolving operating model. Freshworks has stated that artificial intelligence now generates more than half of its code, reflecting how automation is increasingly being integrated into engineering and product workflows. The company is also said to be simplifying parts of its sales and management structure as it adjusts to these changes.
The layoffs mark the second workforce-reduction exercise at Freshworks this year, according to reports. The move comes despite the company recently being linked to a $200 million funding round led by investment firms Bond Capital and Insight Partners.
The developments highlight a broader shift underway across the software industry, where companies are increasingly using AI to automate routine coding and operational tasks. As AI-generated code becomes more common, firms are reassessing workforce structures and reallocating hiring towards specialised areas such as platform engineering, infrastructure reliability, and AI operations.
At the same time, the trend is also raising concerns around software quality, code maintenance, testing, and long-term technical debt as reliance on AI-assisted development scales up across the sector.
