Nasdaq-listed SaaS platform Freshworks revealed it would be cutting 13% of its global workforce, impacting around 660 employees as part of a restructuring effort to streamline operations. With a workforce of over 5,000 employees across regions including India, Germany, France, the US, the UK, and the UAE, this reduction aims to optimize resources and focus on growth areas.
In its stock exchange filing, Freshworks stated that the layoffs would incur charges of $11 million to $13 million in the fourth quarter of 2024. These expenses primarily cover cash outlays for separation-related payments, employee benefits, and other associated costs. The company aims to complete this restructuring plan by the close of the year.
Freshworks’ CEO Dennis Woodside explained that the decision follows a strategic reorganization focused on prioritizing the company’s Employee Experience (EX) business, which is experiencing significant growth. As part of the restructuring, Freshworks has combined its Customer Experience (CX) product teams—support, sales, and marketing—and shifted resources to its expanding EX division. Woodside, who took over as CEO in May after Girish Mathrubootham stepped down, emphasized that these decisions were made thoughtfully to establish a robust foundation for the company’s future.
Alongside the layoffs, Freshworks announced a stock buyback program authorized by its board, allowing the repurchase of up to $400 million of its outstanding Class A common stock. This move aligns with efforts to boost shareholder value and reflects the company’s confidence in its long-term growth potential.
For the third quarter ending in September, Freshworks reported a 7.16% revenue increase, reaching $186.57 million compared to $174.1 million in the prior quarter. However, net losses rose by 49% to $29.96 million from $20.1 million, despite prior reductions in losses. Year-over-year, revenue grew by 21.5% from $153.5 million, while losses slightly decreased by 3.4% from $31 million. Freshworks expects Q4 revenue to range between $187.8 million and $190.8 million, with annual revenue anticipated to reach between $713.6 million and $716.6 million.
