Freshworks, the Nasdaq-listed SaaS company, has announced a 13% reduction in its global workforce, impacting approximately 660 employees. The company, which employs over 5,000 individuals across various countries, including India, Germany, France, the US, the UK, and the UAE, is taking this step as part of a broader effort to streamline operations.
The company has projected that the restructuring will result in charges ranging from $11 million to $13 million in Q4 2024, primarily for cash expenses related to severance, employee benefits, and other associated costs. Freshworks expects the restructuring process to be completed by the close of this year.
CEO Dennis Woodside, who took over in May 2024 following Girish Mathrubootham’s departure after 14 years, shared that the company’s recent moves are aimed at prioritizing its rapidly expanding Employee Experience (EX) business. “We began by merging teams focused on Customer Experience (CX) products, including support, sales, and marketing, while reallocating resources to boost the growth of EX. These decisions are part of our strategy to create a solid foundation for the future,” he explained in a company filing.
In addition to the workforce changes, Freshworks announced that its board has approved a stock repurchase plan worth up to $400 million, aimed at purchasing outstanding Class A common stock.
For the third quarter, Freshworks reported a revenue increase of 7.16%, reaching $186.57 million, up from $174.1 million in Q2 2024. Despite the revenue growth, net losses rose by 49%, amounting to $29.96 million, compared to $20.1 million in the prior quarter, when the company had successfully reduced its losses by 13%.
On a year-over-year basis, Freshworks saw a 21.5% increase in revenue, up from $153.5 million in the same quarter of the previous year. The company’s losses narrowed by 3.4%, from $31 million to $29.96 million.
Looking ahead, Freshworks anticipates Q4 revenue to fall between $187.8 million and $190.8 million, reflecting a growth rate of 17% to 19% year-over-year. The company also projects a full-year revenue of approximately $713.6 million to $716.6 million.