Freshworks raises annual results forecast, to lay off 13% of staff

IT service management firm Freshworks has raised their forecast for the annual results while also saying they will be laying off 13% of the workforce to streamline operations.

Freshworks raised its annual revenue and profit forecasts on Wednesday after upbeat third-quarter results, helped by demand for its AI-driven products, sending its shares up more than 15% in extended trading.

The California-based company said it will lay off 13% of its workforce, or 660 employees, globally in a bid to streamline operations. It expects to book about $11 million to $13 million in restructuring charges in the fourth quarter.

Freshworks expects the restructuring plan will complete by the end of the fiscal year ending Dec. 31.

Businesses are digitizing their operations with AI tools, which is boosting demand for companies such as Freshworks.

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.

The company has more than 68,000 customers, including Databricks, American Express, Nucor and Sony . It competes with companies such as Salesforce and ServiceNow.

Freshworks now expects annual revenue to be between $713.6 million and $716.6 million, up from its prior expectations of $707 million to $713 million.