Freshworks, the California-based software company, announced plans to lay off 13% of its workforce, equating to 660 employees globally. Freshworks reported strong third-quarter earnings on Wednesday, driven by increasing demand for its AI-powered products.
Freshworks said this move is necessary to streamline operations and optimise efficiency. Freshworks expects to incur $11 million to $13 million in restructuring charges during the fourth quarter as it implements these changes.
The restructuring plan is set to be completed by the end of the fiscal year, which concludes on December 31, 2024.
According to reports, Freshworks has raised its annual revenue and profit expectations following the positive results.
Freshworks now anticipates annual revenue between $713.6 million and $716.6 million, an increase from its previous forecast of $707 million to $713 million. Additionally, the company revised its annual adjusted profit per share forecast to 38 to 39 cents, up from the earlier estimate of 32 to 34 cents.
Freshworks has benefited from the widespread digital transformation as businesses increasingly adopt AI tools to enhance their operations.
The company provides tools such as Freshservice, an IT service management software that helps businesses with employee onboarding and management and Freshdesk, a customer service tool designed to deliver fast solutions to customer issues.
Freshworks serves more than 68,000 customers, including major names like Databricks, American Express, Nucor, and Sony, and competes with leading firms such as Salesforce and ServiceNow.
For the third quarter, Freshworks posted a 22% increase in revenue, reaching $186.6 million, which exceeded analysts' expectations of $181.6 million.
The company also reported an adjusted profit per share of 11 cents, surpassing the expected 8 cents. Freshworks is forecasting fourth-quarter revenue to fall between $187.8 million and $190.8 million, which aligns with analyst projections.
Freshworks forecast fourth-quarter revenue to be between $187.8 million and $190.8 million, the midpoint of which was in line with estimates.
(With inputs from Reuters)
Catch all the Business News , Corporate news , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.