HubSpot announced on Tuesday that it is cutting 7% of its workforce—roughly 660 employees—as it reorganizes around what it calls AI-driven customer outcomes.
The layoffs come as investors have spent months questioning whether AI will reduce the need for businesses to pay for software like HubSpot’s, a fear dubbed the “SaaSpocalypse.”
HubSpot’s platform helps companies manage their customers, sales, and marketing. The company was removed from the FTSE All-World Index (USD) last month after a decline in its stock price, a report from Simply Wall St noted. The stock is down more than 43% this year as of this writing.
After the layoffs news was announced Tuesday, premarket shares of HubSpot Inc (NYSE: HUBS) rose over 1%, but they were down again by 1.57% as of midday trading.
Building a “flatter organization”
Yamini Rangan, CEO of HubSpot, explicitly told employees in a memo that the layoffs were “not driven by AI-related efficiencies.”
Rather, the aim was to focus on “aligning our organization with our strategy and how we need to operate going forward,” Rangan wrote.
She added that the goal is to “build a flatter organization with fewer layers” by cutting back on management.
Still, AI has been central to the company’s concerns. In August, Rangan blamed AI for why the company “got off to a slow start” in April as HubSpot was trying to adjust its product and pricing.
“We’re in the middle of a real transition to AI, and we are making deliberate choices to lead in it,” she said on an earnings call.
The restructuring is estimated to cost between $65 and $75 million, mostly in severance. The company said that laid-off employees will receive 20 weeks of base pay, one week per year of service (capped at 30 weeks), five months of COBRA and Modern Health healthcare benefits, and can keep their laptops.
Tech industry layoffs have increased this year
HubSpot’s layoffs are part of a growing wave of staff reductions across software companies over the last year.
In March, Atlassian laid off 10% of its staff, around 1,600 jobs, to fund an AI investments, according to the CEO. Oracle announced three major layoffs in March, June, and September, losing tens of thousands of jobs to invest in AI.
Salesforce cut about 4,000 customer service jobs in late 2025, and then made additional cuts earlier this year. Workday cut 400 support roles in February, then another 2.5% of the staff at the end of September.
Some company leaders have indicated that AI efficiencies mean they can do more with less, leading to fears of workers being replaced by AI.
HubSpot’s challenge may be different because investors fear that AI could replace the product itself. Some executives, including OpenAI’s Sam Altman, have accused tech companies of engaging in “AI washing,” or falsely blaming AI for corporate layoffs.
When asked for comment, HubSpot referred Fast Company to Rangan’s message from Tuesday morning.
