Freshworks cuts 90 jobs in select teams to realign biz

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NEW DELHI : ṁ Nasdaq-listed Freshworks Inc. has fired around 90 employees globally, becoming the latest in a series of technology firms to trim their workforce amid a funding winter and a meltdown in tech stocks.

The software-as-a-service (SaaS) firm laid off employees across product, marketing, and sales verticals as part of a restructuring exercise.

“To fuel our business growth, we made organizational changes to create better alignment across the company. We shifted some existing roles in product, marketing and sales to support more critical initiatives and reduced the need for a small number of others – less than 2% of our workforce. Freshworks did not do a company-wide layoff,” a company spokesperson said.

Shares of Freshworks fell 3.43% on Thursday to close at $14.63 apiece. On Friday, the stock rebounded 2.8% to $15.80 in early trading on Nasdaq.

A total of 60 employees have been impacted in India, which is nearly 1% of the company’s 5,500-strong global headcount. The company, which was co-founded in 2010 in Chennai before shifting its headquarters to San Mateo, California, in the US, continues to have a large workforce in India.

This year has been marked by a series of layoffs by tech companies worldwide as they sought to reorient their businesses in a post-covid business environment. Mirroring the business turmoil, the tech-heavy Nasdaq Composite index has lost more than 31% since January, eroding the wealth of investors of several large corporates.

With investor sentiment hammered, tech firms have been cutting costs to ensure a longer runway. Layoffs have been rampant as companies worked to conserve cash and protect margins.

So far, global tech giants such as Meta (Facebook), Twitter and Amazon as well as Indian SaaS firms such as Chargebee, Clear, and FarEye have reduced their headcount.

Last month, Tiger Global-Chargebee laid off around 10% of its workforce or 142 employees. The step was taken to tackle the ongoing macroeconomic challenges and also to pare debt accumulated in the past few years, Chargebee co-founder Krish Subramanian had said.

Also, logistics SaaS startup FarEye laid off around 250 employees in June. The company had to make some hard decisions to reduce its team across operations and services, Kushal Nahata, chief executive officer and co-founder, FarEye, said at the time.

However, some firms in the SaaS space are trying to cut other costs to protect jobs. For instance, Freshworks’ rival Zoho plans to lower its marketing costs to mitigate the impact of the unfavourable macroeconomic situation, instead of letting go of its employees.

“We’re optimistic for the next few years, but at the same time, realistic due to the ongoing market conditions,” Zoho co-founder and CEO Sridhar Vembu said last month.

The layoffs, however, are not limited to the SaaS startups as those operating in edtech, ecommerce, logistics and crypto segments have also fired staff.

Edtech startups, including two of the largest edtech giants Byju’s and Unacademy, have laid off thousands of employees as the sector undergoes a churn amid reopening of educational institutions and a liquidity crunch. Other edtech startups that gave pink slips to their employees include Frontrow, LEAD, Toppr, Byju’s-owned WhiteHat Jr, SuperLearn and Eruditus.

In the e-commerce space, startups like B2B (business-to-business) platform Udaan, e-commerce enabler Dukaan, quick commerce startup Fraazo, used car marketplace Cars24 and social commerce platforms CityMall, Meesho and Trell have sacked employees in one of the harshest years for Indian startups.

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