So here’s a number that should make every software engineer sit up straight.
Dennis Woodside, the CEO of Freshworks, said it plain as day during their Q1 earnings call this week: “Over half of our code is now written by AI.”
That’s not a futuristic prediction. That’s a Tuesday morning fact for a Nasdaq-listed Indian SaaS company that was founded in a Chennai apartment 16 years ago.
And with that one line came the announcement that Freshworks is cutting 500 jobs — 11% of its global workforce.
This isn’t Freshworks being an outlier. This is Freshworks being the canary in the coal mine.
The Numbers Tell a Story
Let’s zoom out for a second.
In the first three months of 2026 alone, Indian startups laid off 1,700 employees — Livpace let go of 1,000 people, Flipkart cut 500 in performance reviews, and Zupee shed 200 more. The reason Livpace gave? They’re transforming into an “AI-native agentic organization.”
Globally, it’s worse. Over 93,200 tech employees have been laid off in 2026 so far, according to layoffs.fyi. Oracle cut 30,000 jobs in March — 12,000 of those in India. Amazon let go of 16,000 in January. Coinbase just fired 14% of its staff this week.
The number that sticks with me: Q1 2026 saw 70,000+ tech layoffs globally, up from 30,000 in Q1 2025. That’s more than double in one year.
And the reason, over and over again, is AI.
What Freshworks Actually Did
Freshworks posted $228.6 million in Q1 revenue — up 16% year-over-year, beating analyst estimates. They’re not in trouble. They’re not burning cash to survive.
But their CEO is saying automation has eliminated the “rote work.” Sales teams are being merged. Management layers are getting cut. And the $8 million restructuring cost? They’re reinvesting the savings into their Employee Experience business.
This is the part people miss. Freshworks isn’t shrinking because it’s failing. It’s reshaping because the economics have changed. Why hire three junior engineers when one engineer with an AI coding assistant can do the same work in half the time?
Woodside’s own words: “Over half of our code is written by AI.” That’s not a boast. It’s a confession that the old math doesn’t add up anymore.
Is This Really About AI?
Here’s the uncomfortable question — are companies using “AI” as a convenient excuse for layoffs they’d do anyway?
Partly, yes. Oracle’s 30,000 job cuts aren’t just about AI. Amazon’s 16,000 cuts aren’t purely automation-driven. Pandemic-era overhiring is still being corrected, venture funding has tightened, and there’s a macroeconomic hangover nobody wants to talk about.
But AI is the accelerant, not the excuse.
When a CEO can say “half our code is AI-written” and the stock doesn’t tank — in fact, the market nodded along — it means the industry has accepted a new baseline. Software companies with 5,000 employees can now deliver the same output with 4,000. And next year, maybe 3,500.
What This Means for Indian Tech
Here’s the thing about Indian IT and SaaS — we built an entire economy on labor arbitrage. The pitch was always “world-class talent at a fraction of the cost.” That model was already under pressure from automation tools, but generative AI has cracked it wide open.
The numbers from Q1 2026 already show it. Indian tech startups raised $3.95 billion — roughly the same as Q1 2025 — but across half the number of deals. Money is concentrating in fewer hands. And those hands want AI-native teams, not large workforces.
This doesn’t mean Indian tech is doomed. Quite the opposite. Companies like Freshworks are showing how to pivot — use AI to cut costs, reinvest into higher-value products, and compete globally on product quality instead of price.
But for individual engineers and developers, the message is clear: the era of “learn any one language and coast for a decade” is over. The engineers who understand AI tools, who build with them, who treat them as multipliers instead of threats — those are the ones who’ll survive this shift.
The Bigger Picture
Freshworks’ 500 jobs is a small number in the scheme of 93,000+ global tech layoffs. But it matters because of what it represents.
This was a healthy, growing company that decided to cut 11% of its staff because AI changed the math. Not a turnaround. Not a bankruptcy scare. A deliberate choice by a profitable company to restructure around a new technology.
When healthy companies start doing this, it’s not a trend. It’s a structural shift.
The Indian SaaS story isn’t over. But the chapter we just closed — the one where you hire first and figure out efficiency later — is well and truly finished.