Freshworks, a California-based software company, announced plans to lay off 13% of its workforce, equivalent to 660 employees worldwide. Freshworks on Wednesday reported strong third-quarter earnings, driven by growing demand for its artificial intelligence products.
Freshworks said the move was necessary to streamline operations and optimize efficiency. Freshworks expects to incur restructuring charges of $11 million to $13 million in the fourth quarter as it implements these changes.
The restructuring plan will be completed by the end of the financial year ending December 31, 2024.
Freshworks reportedly raised its annual revenue and profit forecasts following positive results.
Freshworks now expects annual revenue in the range of $713.6 million to $716.6 million, up from its previous forecast of $707 million to $713 million. In addition, the company raised its forecast for annual adjusted profit per share to 38 to 39 cents from the previous range of 32 to 34 cents.
Artificial Intelligence-driven growth increases demand for Freshworks
Freshworks is benefiting from widespread digital transformation as businesses increasingly adopt artificial intelligence tools to enhance operations.
The company’s tools include Freshservice, an IT service management software that helps businesses with employee onboarding and management, and Freshdesk, a customer service tool designed to provide quick solutions to customer problems.
Freshworks serves more than 68,000 customers, including well-known enterprises such as Databricks, American Express, Nucor and Sony, and competes with leading companies such as Salesforce and ServiceNow.
Freshworks’ third-quarter revenue and profit exceed expectations
Freshworks’ third-quarter revenue grew 22% to $186.6 million, exceeding analysts’ expectations of $181.6 million.
The company also reported adjusted profit of 11 cents per share, beating estimates of 8 cents. Freshworks expects fourth-quarter revenue to fall by $187.8 million to $190.8 million, in line with analysts’ forecasts.
Freshworks expects fourth-quarter revenue to be between $187.8 million and $190.8 million, with the midpoint in line with expectations.
(With information from Reuters)
