Freshworks announced on May 6, 2026, it would cut 11% of its global workforce, amounting to approximately 500 employees, as the software company restructures in response to rapid advancements in artificial intelligence. The company cited the need to align operations with evolving product demands driven by AI adoption across the sector.

The announcement triggered a 5% decline in Freshworks' shares during extended trading. Executives stated the cost savings from the layoffs would help fund ongoing investments in AI-integrated platforms. The company did not disclose specific regional impacts or roles affected.

The layoffs follow a similar move by Australian software firm Atlassian, which last month announced it would reduce its workforce by 10%. Industry analysts attribute the trend to rising R&D costs tied to AI development and intensified competition in enterprise software.

Freshworks said it would begin notifying affected employees immediately and provide severance packages, outplacement support, and extended healthcare benefits. The company reaffirmed its financial guidance for the fiscal year.

The corporate restructuring is expected to be completed by the end of June 2026, and the company will hold an investor call on May 8 to discuss long-term strategy and AI product roadmaps.