CRM software company Freshworks said it plans to cut 11% of its workforce, or ~500 jobs, as it deals with AI's impact; FRSH has dropped ~26% in 2026 (Anhata Rooprai/Reuters)

Freshworks is cutting 11% of its workforce (~500 jobs) in response to AI's disruptive impact on the CRM market, signaling that established software vendors must fundamentally restructure operations to remain competitive as AI commoditizes traditional functionality. This trend signals that IT organizations should expect continued market consolidation and heightened pressure on software spending, requiring CIOs to reassess vendor viability and prioritize AI-native solutions that can deliver measurable ROI. The company's 26% stock decline reflects investor concerns about margin compression in the software sector, highlighting the urgent need for vendors to balance innovation investments with profitability—a challenge that will reshape enterprise software contracts and support models.