Freshworks to cut its workforce by 13 pc to streamline operations
The company expects the plan will be substantially complete by the end of the fiscal year ending December 31, 2024.
Girish Mathrubootham, the founder of Freshworks
NEW DELHI: Artificial intelligence (AI) service software provider Freshworks has announced a workforce reduction of 13 per cent to streamline its operations, affecting at least 660 employees worldwide.
In a stock exchange filing on Nasdaq, the Chennai/US-based company said that in November 2024, its committed to a restructuring plan to better align the company's talent with its strategic priorities and to improve operating efficiency.
“The company estimates that this will result in approximately 13 per cent reduction in headcount and approximately $11 million to $13 million in charges in the fourth quarter of 2024, consisting primarily of cash expenditures for separation-related payments, employee benefits and related costs,” the filing read.
The company expects the plan will be substantially complete by the end of the fiscal year ending December 31, 2024.
“We began by combining teams focused on Customer Experience (CX) products, including support, sales, and marketing, and reallocating people and investments to prioritize our fastest growing Employee Experience (EX) business. These decisions were made thoughtfully and carefully to set a strong foundation for our future,” said Dennis Woodside, CEO of Freshworks, in the stock exchange filing.
For the quarter ending September 30, Freshworks’ revenue increased 7.16 per cent to $186.57 million from $174.1 million in last quarter.
During the period, net losses increased by 49 per cent to $29.96 million, compared to $20.1 million in the previous quarter.
Freshworks expects to close Q4 with revenue between $187.8 million and $190.8 million, reflecting a 17-19 per cent year-on-year growth.
In June this year, the company acquired all outstanding shares of Device42, an IT asset management company. The total purchase price consideration is $238.1 million, which consists of $225.3 million in cash paid, including $11.4 million of cash acquired, $8.9 million in common stock issued, and $3.9 million in assumed and converted stock option awards.
Girish Mathrubootham, the founder of Freshworks, started the company in Chennai in 2010 and transformed it into a major force in the SaaS industry.