SaaS firm Freshworks undertakes another round of performance-based layoffs

Layoffs

Nasdaq-listed Software-as-a-Service firm Freshworks has undertaken another round of layoffs within its product, engineering and go-to-market (GTM) teams from the US location citing performance reviews, sources told Moneycontrol.

"The layoffs are more senior-level this time. Senior directors, product managers, and senior vice presidents of teams like GTM were let go. This is also mostly mid-market employees," A source privy to the information told Moneycontrol on condition of anonymity.

Freshworks' GTM team includes marketing, strategy and enablement.

"A senior vice president was laid off, he sits in the US... There was no announcement from the company yet. Some people left the team WhatsApp groups and later we got to know," said another employee of Freshworks.

Moneycontrol could not ascertain the number of employees impacted.

This is the third round of layoffs at Freshworks as the company is finding ways to survive the macroeconomic pressure and cut costs. In March of 2023, Freshworks announced its second round of layoffs of around 114 staff citing performance reviews. The firm in December last year laid off 2 percent of its staff or 90 people to cut costs.

The company has a workforce of around 5000 employees globally.

Freshworks did not respond to Moneycontrol's queries. The story will be updated with their response once it is received.

The SaaS ecosystem in India and globally is starting to feel the heat of slowing demand growth ahead of a likely global recession and are beginning to implement cost-cutting measures including layoffs.

A recent report by Chiratae and Zinnov said that delayed sales cycles are a key challenge for SaaS founders as customers' spending caution increases as they aim to optimise cloud costs.

“There is a risk of decreased customer demand in 2023 due to a recession-like situation which may reduce gross margins,” the report said.

End of last year, Chargebee reported about 400 employees in 2019 which grew to more than 1,000 in 2022. Freshworks had about 1,000 employees in 2019, which grew by 4,000 in 2022. In January of 2023, Bengaluru-based Exotel too laid off around 142 employees.