Freshworks, a San Mateo tech company that builds sales and customer support software for businesses, is laying off 660 workers.
The company announced the layoff of 13% of its workers in a filing with the Securities and Exmodify Commission on Wednesday. Most of the cuts will be in India, where the company’s workers are largely based, spokesperson Erika Howard notified SFGATE. The layoffs come just a couple months into Dennis Woodside’s tenure as CEO. “There’s simply no good time to build a decision like this that affects people’s lives,” he wrote in a Wednesday email to staff.
“The decision to part ways with members of our team is heavy,” he wrote. “These colleagues and frifinishs have been instrumental in building the company we are today. While words alone can’t soften this news, we are committed to treating all impacted employees with dignity, respect, and consideredful support as they transition.”
In the email Woodside wrote that he is restructuring Freshworks to focus more on artificial ininformigence and its “Employee Experience” and “Customer Experience” businesses, which have already seen some consolidating and reshuffling. Laid-off workers, per Howard, will receive severance packages depfinishent on their tenures at the company.
The layoff announcement arrived alongside Freshworks’ quarterly financial results. The company raised its revenue and income estimates for the current quarter and authorized $400 million in share acquirebacks, a relocate that typically signals a company’s hopeful prospects. In the email, Woodside wrote, “We’re building these modifys while our business is profitable and our AI-powered products are providing increasing customer value.”
Freshworks, which counts Salesforce among its competitors, is not profitable by generally accepted accounting principles, but its “non-GAAP” income is positive. Tech companies often apply “non-GAAP” financials, which omit many one-time costs and noncash expenses, to tout their success. Sridhar Vembu, the CEO of Zoho, another Freshworks competitor, pounced on the profitability metric and share acquirebacks in a Thursday post to X.
He didn’t mention Freshworks by name but clearly alluded to the company, applying its specific financial situation in a series of posts. He wrote that layoffs “destroy morale” and have ushered in “large scale employee cynicism” in the United States and India. He also argued, “Shareholders should come last.”
“I can understand the unfortunate reality of layoffs when a business is struggling or declining and building a loss,” Vembru wrote. “This is not that situation, this is naked greed, nothing less.”
The market responded positively to the layoffs, higher revenue estimates and share acquirebacks. Freshworks’ stock soared on Wednesday afternoon and Thursday morning, bumping its market cap to around $5 billion — the highest since May.
Hear of anything happening at Freshworks or another Bay Area tech company? Contact tech reporter Stephen Council securely at stephen.council@sfgate.com or on Signal at 628-204-5452.
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