Tense atmosphere reigned Nasdaq-listed Freshworks since Monday since founder and chief executive Girish Mathrubootham announced the details of its latest round of layoffs which put around 114 in the firing line, at the quarterly internal All-Hands meeting.
“Multiple questions from the employees’ anonymous chatbox such as why is there a layoff and why at a time when the job market is facing a downturn are being raised to ‘G’ (As Girish Mathrubootham is addressed at Freshworks),” said one of the staffers on the condition of anonymity.
Mathrubootham explained to employees that out of the 114 employees who were affected around 90 are performance layoffs and around 24 are role eliminations.
“There are roles that have gotten redundant like some roles within diversity, equity, and inclusivity teams some in the content and HR side. So those roles are eliminated by the company now,” the employee quoted above said.
The founder said that the reason for layoffs is due to the tight macroeconomic condition and that the worst is yet to come.
“G (Girish Mathrubootham) answered every question in detail, he seemed pretty upset too and it was said that this is mainly due to the tight macroeconomic condition. What bothers me more is that there was an indication that the ‘worst is yet to come’,” said another employee at Freshworks.
Freshworks did not respond to Moneycontrol's queries.
Laid-off employees were promised two months of salary as severance package.
“This may vary for different employees but some of us were promised two months of salary and other health insurance packages to continue for a period of time,” said an employee who recently got laid off from Freshworks.
Moneycontrol was the first to report on March 16th that the company has undertaken another round of layoffs across teams in its offices in India and the US.
"Freshworks has not conducted org-wide layoffs, and continues to hire for open positions. We continue to review organizational efficiencies to avoid duplicated effort and maintain a strong performance culture. As a result a small number of individuals are impacted and are leaving the company," Freshworks said in an emailed response to Moneycontrol's queries on March 16th.
The company has a workforce of around 5,200 employees globally.
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.
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.
Enterprise SaaS company Salesforce too last year reportedly laid off more than 2,000 employees recently, citing low demand as the reason.
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