Freshworks, in an effort to navigate macroeconomic pressures and reduce expenses, is implementing its third round of layoffs. With approximately 5,000 employees, the company is taking steps to ensure its survival and financial stability.

"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," an anonymous source familiar with the matter shared the information with Moneycontrol.

The Go-to-Market (GTM) team at Freshworks encompasses marketing, strategy, and enablement functions.

"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.

The report from Moneycontrol did not provide a definitive figure regarding the number of employees affected.

Freshworks is currently undergoing its third round of layoffs as part of its efforts to navigate macroeconomic pressures and reduce costs. In March 2023, the company announced its second round of layoffs, affecting approximately 114 employees due to performance reviews. 

Previously, in December of the previous year, Freshworks had implemented cost-cutting measures by laying off 90 staff members, which accounted for around 2 per cent of its workforce.

As the possibility of a global recession looms and demand growth slows down, both the Indian and global SaaS ecosystems are beginning to experience the impact. To mitigate the effects, companies in this sector are starting to implement cost-cutting measures, which may include layoffs.

According to a recent report by Chiratae and Zinnov, SaaS founders are facing a significant challenge due to delayed sales cycles. As customers become more cautious about spending and strive to optimise their cloud costs, SaaS companies are experiencing a slowdown in the purchasing process.

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

By the end of the previous year, Chargebee had reported employing approximately 400 individuals in 2019, which expanded to over 1,000 by 2022. Freshworks, on the other hand, had around 1,000 employees in 2019, but experienced significant growth to reach a workforce of 4,000 by 2022. 

In January 2023, Exotel, a company based in Bengaluru, had to implement layoffs affecting approximately 142 employees.