Nasdaq-listed Software firm Freshworks lays off employees amid macroeconomic pressures

Freshworks, a Nasdaq-listed Software-as-a-Service (SaaS) firm, has laid off some of its employees across teams, particularly sales, marketing, and engineering, citing 'performance and staffing redundancies' as the software industry suffers from tight macroeconomic pressures.

Another source said that many employees on the sales team were kept on a Performance Improvement Plan (PIP), in which an employee is given a warning and a time period to improve performance.

"Many people were asked to move to other teams and some were kept on PIP. Mainly those employees were laid off, I think," the person said. "We are promised severance however it differs across teams," the person said.

Chargebee, a San Francisco and Chennai-based software firm, laid off about 10% of its workforce, or about 142 people, due to tight macroeconomic pressures and to reduce the startup's accumulated operational debt, said co-founder Krish Subramanian in a LinkedIn post.

Salesforce announced in November that it would lay off approximately 2,000 employees in order to cut costs. Last month, Zendesk also announced the layoff of approximately 300 employees.

As recession looms over the key US market, Indian SaaS companies have been conducting various cost-cutting exercises such as freezing hiring or recruiting judiciously.

Girish Mathrubootham, the chief executive and founder of Freshworks, previously stated that the company is not hiring aggressively due to the US Fed's stance and a concern about a global recession. "Not just SaaS but all companies are staying very cautious," he said.

Freshworks reported consolidated revenue of $128.8 million for the third quarter that ended September 2022, an increase of approximately 37 percent year on year.

During the company's earnings call, Mathrubootham said that the company is staying cautious of the slow growth in the economy.

"While we have reported a strong quarter, we are not immune to this slower economy. While new businesses picked up, expansion slowed down even as we reduced our growth forecasts and headcount needs," he said.

Mathrubootham added that despite the slow economic growth, the firm witnessed steady growth in markets like North America, in the mid-market in the enterprise segment.

Invite your friends and family to sign up for MC Tech 3, our daily newsletter that breaks down the biggest tech and startup stories of the day