Freshworks Implements Third Round of Layoffs in Six Months
- ByStartupStory | June 12, 2023
Freshworks, a SaaS unicorn listed on NASDAQ, has allegedly undergone a recent wave of downsizing within its US teams, primarily in the product, engineering, and go-to-market (GTM) departments. These layoffs were reportedly carried out based on performance evaluations, as per insider sources.
According to a reliable source cited in the report, Freshworks reportedly terminated several senior positions, including senior directors, product managers, and senior vice presidents. The impacted individuals were part of the company’s GTM team, which encompasses marketing, strategy, and enablement. Other sources mentioned that no official announcements were made, and employees became aware of the layoffs through their departure from WhatsApp groups. The exact number of affected employees is currently undisclosed.
A spokesperson said, “Freshworks does not comment on the management of the workforce in our normal course of business. There have been no organization-wide layoffs to report.”
Freshworks has reportedly experienced its third round of layoffs in a span of six months, following previous instances in December 2022 and March 2023. In December, the company terminated approximately 90 employees, which accounted for around 2% of its workforce. Although Freshworks did not officially disclose the number of affected employees during the second round in March, media reports estimated that approximately 114-125 staff members were impacted.
Freshworks, established in 2010 by Girish Mathrubootham and Shanmugam Krishnasamy, boasts a workforce of over 5,000 employees, as indicated by their LinkedIn account which lists more than 7,500 employees. The company specializes in providing a comprehensive range of software solutions for customer service and support, customer engagement, and IT service management. These recent layoffs have occurred despite Freshworks achieving its first-ever adjusted operating profit in the January-March quarter of 2023. During this period, the company reported a non-GAAP (Generally Accepted Accounting Principles) profit of $3.88 million.
In the first quarter of 2023, Freshworks reported a net loss of $42.66 million, representing a decline of over 13% from the year-ago quarter’s $49.06 million. Adding to the challenges, Freshworks faced the departure of co-founder and CTO Krishnasamy in late 2022, with no replacement announced as of yet.
As of June 9, the SaaS unicorn’s shares closed at $15.67 per share. While this price reflects a 38.18% increase compared to the same period last year, it is down by 66.48% from its listing price. In a broader context, Indian startups have been affected by global macroeconomic headwinds and a funding winter, resulting in over 27,000 employee layoffs since the beginning of 2022, as highlighted by the Reports ‘Indian Startup Layoff Tracke’.
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