Freshworks cuts 11% of staff as AI reshapes SaaS operations

Freshworks’ decision to cut 11% of its workforce, about 500 jobs, is more than a headcount reset. With more than half of its code now written by AI and routine work shrinking across the business, the company is showing how quickly SaaS vendors can change the service model behind the product, not just the feature set. For monday.com admins and operations leaders, the real question is whether a vendor’s AI push improves response times and setup speed, or quietly shifts more of the burden onto customers.

The San Mateo, California, company said the restructuring will affect departments globally, as it merges sales teams, trims management layers and automates work. It said the savings will be reinvested in its Employee Experience business, a signal that the company is still betting on growth even as it pulls back elsewhere. Freshworks’ shares fell more than 8% in extended trading after the announcement. The move came after a strong first quarter, when revenue reached $228.6 million, up 16% from a year earlier, and management said it landed the two largest deals in its history, including its first $1 million-plus ARR deal. Freshworks said it expects about $8 million in one-time restructuring charges, with most of that hitting in the second quarter.

The cuts also fit a pattern. In November 2024, Freshworks CEO Dennis Woodside told employees the company would reduce headcount by about 13%, or roughly 660 workers, in a separate strategic refocus. Its latest annual filing showed how concentrated the business is outside the United States, with about 3,600 employees in India as of December 31, 2025, roughly 81% of the total workforce. That makes restructuring decisions especially significant for India-based tech labor markets and for the support, engineering and back-office roles that often sit closest to SaaS customers.

The lesson lands directly at monday.com, which has been leaning into AI on its own platform. In its 2025 results, monday.com said monday vibe was the fastest product in its history to pass $1 million in ARR, and that customers with more than $50,000 in ARR accounted for 41% of total ARR. In March, the company added AI agents to its platform, pushing the competition in work-management software toward AI-assisted and AI-executed work. That is why Freshworks matters to buyers, not just workers: if AI lets vendors ship faster and staff leaner, monday.com teams will need to know which promises still depend on human support, human onboarding and human escalation when the software itself starts doing more of the work.