Freshworks announces 13% layoffs, $400 Mn stock buyback, and Q3 results

Nasdaq-listed SaaS platform Freshworks has announced a workforce reduction of 13% to streamline its operations, affecting 660 employees globally. 

Freshworks has more than 5,000 employees across India, Germany, France, the US, the UK, and the UAE, among others.

In a stock exchange filing, Freshworks stated that this decision is anticipated to incur charges of $11 million to $13 million in the fourth quarter of 2024, primarily covering cash expenses for separation-related payments, employee benefits, and associated costs.

The company expects to complete its restructuring plan by the end of the year.

“We began by combining teams focused on Customer Experience (CX) products, including support, sales, and marketing, and reallocating people and investments to prioritize our fastest growing Employee Experience (EX) business. These decisions were made thoughtfully and carefully to set a strong foundation for our future,” said Dennis Woodside, CEO of Freshworks, in the filing.

Woodside became CEO of Freshworks in May this year, following Girish Mathrubootham's decision to step down from the role of chief executive officer after 14 years.

Freshworks has also announced that its board of directors has authorized a stock repurchase program of up to $400 million of the company’s outstanding Class A common stock.

For the quarter ending September, Freshworks’ revenue surged 7.16% to $186.57 million from $174.1 million (quarter ending June 2024). During this period, its net losses increased by 49% to $29.96 million, compared to $20.1 million in the previous quarter, when it managed to reduce losses by 13%.

When compared to the same quarter of the previous year, Freshworks’ revenue went up 21.5% from $153.5 million and losses decreased 3.4% from $31 million.

The company expects to close Q4 (December quarter) with revenue between $187.8 million and $190.8 million, reflecting a 17% to 19% year-on-year growth. It also mentioned that the full fiscal year will end with revenue of around $713.6 million to $716.6 million.