Freshworks & Coinbase Layoffs: What Employees Were Told Before AI Took Over Their Jobs

They weren’t informed that the company was in trouble. They were not informed of the change in the market. They were told something much more disturbing — that a machine could handle their job in less time, at a lower cost and without taking a day off. In early May 2026, two high-profile technology firms announced that they would be eliminating more than 1,200 positions, and both CEOs blamed AI.

The Layoffs of Freshworks & Coinbase have struck terror in the hearts of many in the global tech world, but it’s not only because they’re so large — it’s because they’re so honest. For the first time, AI is not abstract as a background to a restructuring announcement. It is the declared main reason for firing the employees.

Freshworks: “Over Half Our Code Is Written by AI”

Freshworks has announced that it will be reducing its workforce by around 500 employees, which is around 11% of the total global workforce.

CEO Dennis Woodside didn’t mince his words. In his message to the employees, he clearly explained that “more than half of our code is now AI-generated”. He said that having AI and automation help software development pipelines has been “a game-changer,” removing the need for “rote work” in software development that he said was a lot of engineering work that is repetitive.

The restructuring is not just a manpower cut. Freshworks is:

• Combining sales teams to minimise duplication of efforts.
• De-layering to reduce governmental red tape.
• In moving ahead with its AI-backed CX and EX products portfolio.

The overall impact on the financial restructuring of Freshworks through AI would stand at Rs.~67 crores (~$8 million) in Q2 2026. The odd thing about the situation here is that despite growing their revenue by 16% in Q1 2026, it wasn’t because they needed to reduce costs in response to stress but as part of their AI Efficiency initiative.

Coinbase: Building “Lean, Fast, and AI-Native”

The biggest US exchange, Coinbase, took an even bigger step, announcing that about 14% of its total staffing, or ~700, were being laid off.

CEO Brian Armstrong‘s address to staff was no different. It’s a company that’s rebuilding itself to be lean, fast, and AI-native, and he said that AI now lets smaller, high-context teams do in days what used to take weeks.

Coinbase’s shift is comprehensive:

• The traditional departmental structure will be replaced by “AI-native pods”.
• The CEOs of these companies have their own set of no more than five management levels under them.
• Leaders are to be “player coaches” rather than “pure managers” who only delegate strategic thinking.

The cost of the Coinbase Workforce Cuts 2026 will likely range from $50 million to $60 million in severance payments, according to a report from Reuters — a one-time expense that Coinbase is clearly prepared to bear in light of its pursuit of an AI-centric strategy.

What Employees Were Actually Told

The affected workers’ communications, in both examples, were noteworthy in being blunt — as opposed to the ‘tech-speak’ used in past cuts (such as ‘rightsizing’, ‘organisational realignment’, ‘strategic pivots’).

Employees at Freshworks were informed that AI has saved them from spending fewer human engineering hours to produce the same amount of output. There was an unspoken message: The company doesn’t need to have as many people doing as much work.

In Armstrong’s memo to employees, he essentially signalled to his staff that the future of Coinbase is small, empowered teams that are augmented by AI, and that jobs focused on managing others, and not doing actual work, had no place in that future.

The Freshworks & Coinbase Layoffs are the first ones to openly acknowledge, without beating around the bush, that AI-driven layoffs have come to tech.

A Wider 2026 Trend: AI Is the New “Market Conditions”

The Freshworks & Coinbase Layoffs are not unique. They are on a fast-growing trend in the entire global technology industry.

Total Tech in 2026 had job losses running into hundreds of thousands in May, while other companies like Meta and Snap also cited gains through efficiency in using AI to justify staff cuts. It’s a familiar story: when companies need to cut, they don’t cut because their revenue is declining; they cut because their revenue is increasing. They’re cutting because AI allows them to produce as much—or more—content with less human effort.

The message in the Freshworks & Coinbase Layoffs is clear: AI isn’t replacing white-collar workers in the distant future. It’s here, and businesses are already responding to it.

Implications for the Future for Technology Positions

The two firms show indications of trends for Corporate AI Restructuring. Below are some important indicators that hint at Corporate AI Restructuring trends, which are structural rather than cyclical in nature.

• Decrease in engineering positions due to programming performed by artificial intelligence programs.
• AI-supported lean teams are increasingly gaining favor, thus reducing middle-management jobs.
• It’s not about the number of individuals within the group, but about their speed and relevance.
• As long as businesses are able to do this without any repercussions and generate revenues in the process, they will continue doing so in the market.

As the Future of Tech Jobs 2026 unfolds, the response to a very straightforward query becomes increasingly significant: What can you accomplish that artificial intelligence cannot accomplish – yet?

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