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The Freshworks layoffs have caused a shiver to run through the international tech community, not only due to the number of people laid off (500), but also because of the cause that led to the layoffs. When one of the CEOs publicly admits that over half the code of his company is now written by AI, then every software engineer, QA tester, and junior developer is left asking the question: ” Am I next?”
The Announcement That Shook SaaS
On May 5, 2026, Freshworks announced it would lay off 11 per cent of its global workforce – about 500 employees – as it faces the wholesale disruption of massive advances in artificial intelligence. The San Mateo-based company that develops customer service and IT support software estimated that restructuring costs, which were one-time expenses, would be about 8 million dollars, mainly in the form of severance.
The Freshworks layoffs caused an immediate market response: the shares dropped more than 8% in extended trading, wiping out much of the value of a share that had fallen about 26% this year.
Over Half Our Code Is Written by AI
The most dramatic scene of Freshworks layoffs 2026 news was not the figure but the frankness. Directly to Reuters, the CEO Dennis Woodside said that more than half of their code is written by AI.
This is what generative AI will do to the occupations that can be seen in real time. The effect of AI-written code is no longer an issue of theory. It is re-engineering balance sheets, employee plans and even complete departments of engineering. Woodside followed by adding that automation had eliminated the “rote work that technology can put to rest” -that is, routine coding, testing, and other repetitive engineering tasks are increasingly being handled by machines, rather than people.
The resulting savings on the merging sales teams, flattening layers of management and automation of workflows will be reinvested in Freshworks Employee Experience department, specifically its service management workflow product, Freshservice.
Which Tech Jobs Are Most at Risk?
The Freshworks layoffs 2026 story is not in isolation, and this is just a piece of information in what is a much larger trend. As per the Layoffs, fyi, a total of 92,462 tech workers have been laid off by 2026. Similarly, AI-related reasons were the reason why peer company Atlassian reduced its workforce by about 10 per cent last month.
Which of the jobs are under the harshest threat? Automation of the technological industry is hurting the most in:
The junior and mid-level software developers who deal with repetitive feature additions and bug fixes – functions now handled inexpensively and more quickly by AI. QA and testing engineers whose manual test-run processes are being supplanted by test automation services offered by AI.
First-line queries have been moved to AI chatbots and ticketing systems operating on the first line of queries at SaaS companies, shoring up routine IT support staff. Product team content and documentation writers, who are generative AI users, are involved with drafts, release notes, and internal wikis.
In the AI vs programmers debate, one of the roles that has stood the test of time includes senior architects working on complex systems, AI/ML engineers working on models and fine-tuning, and product strategists who translate business needs into technical direction.
A Sector-Wide Reckoning
Freshworks is not the only one that took this pivot. The replacement of software engineers by AI is now a trend that is being documented throughout the SaaS industry. AI-coding companies (both startups and enterprises) are finding that they can ship more with fewer employees. This dares the job security of software developers directly at all levels.
The current trend of IT job cuts is increasing. Coding jobs future 2026 forecasts indicate that the AI engineer workforce will take off as the traditional coder workforce will decline. The message to the workforce is clear: reskilling to work in AI is no longer an option but a survival strategy in one’s career.
What Comes After the Cuts?
Q1 2026 Freshworks revenue is 16% above Q1 2025, and is more than $228.6 million, which is above the forecasts and is an indication that Freshworks business is not unhealthy. The layoffs do not mean that the company failed; it simply means that the company is changing. Reduction in the number of personnel, increased automation, and increased output per person. This is the playbook of digital workforce trends being implemented live.
The greater question of the tech job market 2026 is whether the displaced workers will be able to absorb the shock. The need for AI engineers in 2026 is a fact, and so is the reskilling gap. All laid-off developers might not be able to easily move to immediate engineering or ML operations.
The Freshworks layoffs are a reflection of the whole industry. AI disruption of jobs is no longer on its way – it is already here. The remaining question is: will your position be on either side?
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