Athira Sethu
Kochi, 7 November 2024
Nasdaq-listed software company Freshworks said it is cutting 13% of its workforce, cutting some 660 positions around the world, to streamline operations and continue efforts to be well aligned to long-term goals.
The company currently employs 5,000-plus full-time employees worldwide and saw cuts in the US, India, among other locations.
Dennis Woodside, Freshworks’ chief executive, said in a letter to staff that restructuring should cost the company between $11 million and $13 million in the fourth quarter of 2024. The amount includes severance pay and other employee benefits. Freshworks expects to complete this restructuring by the end of 2024.
This is not the first round of layoffs for Freshworks. The company has witnessed several rounds of job cuts in the last one year despite earlier rounds of cutting jobs for March and June 2023 and also December 2022 when it released 90 employees worldwide from which 60 were Indians.
Woodside, who joined as CEO in May 2024 after the company’s founder, Girish Mathrubootham, moved out, remembered that one of his first orders of business was fresh review of Freshworks’ strategy. Based on this, he determined the three growth priorities into which areas: employee experience, customer experience, and AI. In the restructuring, Freshworks will consolidate some of the teams focused on customer experience and place more resources into its rapidly growing employee experience business.
According to Woodside, those changes will allow Freshworks to better serve its customers and set a strong foundation for future success.
Revenues from Freshworks rose 22% sequentially to $186.6 million in Q3 of 2024 from the same $153.6 million reported in the third quarter of 2023.
Revenue guidance for Q4 stands at $187.8 million to $190.8 million, with 20% growth predicted in total revenues for the year-end quarter at $713 million to $716.6 million. Even though there is revenue growth, Freshworks posted $30 million net loss in Q3 whereas it was $31 million a year ago.
The company also said the board had approved a share buyback plan for $400 million, although did not specify when the company would execute this plan. Freshworks stock has been up 5.23% at $13.09 on Wednesday, signaling increased investor confidence.
Freshworks was founded in the year 2010 in Chennai, India. It specializes in CRM software that is available for small and medium enterprises. Today the company is serving more than 68,000 customers worldwide, and the top brands among them are American Express, Sony, and Bridgestone.
