Freshworks Inc. (FRSH) experienced a significant pre-market plunge of 6.42% on Wednesday, following the release of its first-quarter 2026 results and a major corporate restructuring announcement.

The business-software company announced it would cut 11% of its workforce, or about 500 jobs, as it grapples with an industry being reshaped by artificial intelligence. CEO Dennis Woodside cited AI use in product and engineering, as well as automation of routine work, as drivers for the decision. The restructuring is expected to incur one-time charges of $7 million to $9 million in the second quarter of 2026.

Concurrently, Freshworks reported mixed financial results for Q1 2026. While revenue of $228.6 million exceeded analyst estimates, adjusted earnings per share of $0.11 fell short of the $0.12 consensus estimate. The combination of the workforce reduction and earnings miss prompted the sharp decline in share price during pre-market trading.