HubSpot announced on Tuesday that it is cutting 7% of its workforce, roughly 660 employees, as the company reorganizes around what it describes as AI-driven customer outcomes. The layoffs mark one of the latest in a growing wave of staff reductions across the software industry, where companies are redirecting resources toward artificial intelligence even as they face questions about whether AI will ultimately replace the products they sell.
In a memo to employees, CEO Yamini Rangan said the job cuts were «not driven by AI-related efficiencies.» Instead, she framed the restructuring as an effort to «align our organization with our strategy and how we need to operate going forward.» The goal, she wrote, is to «build a flatter organization with fewer layers» by reducing management ranks. HubSpot’s platform helps companies manage customers, sales, and marketing, and the company has been under pressure to adapt its product and pricing as AI tools reshape how businesses handle those functions.
The layoffs are estimated to cost between $65 million and $75 million, mostly in severance. Affected employees will receive 20 weeks of base pay, plus one week per year of service capped at 30 weeks, five months of COBRA and Modern Health healthcare benefits, and can keep their laptops. The company referred questions to Rangan’s message.
Despite Rangan’s insistence that AI efficiencies are not the cause, AI remains central to HubSpot’s challenges. In August, she blamed AI for the company’s «slow start» in April as it adjusted 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. Investors have spent months questioning whether AI will reduce the need for businesses to pay for software like HubSpot’s, a fear that has been dubbed the «SaaSpocalypse.» The company was removed from the FTSE All-World Index last month after a decline in its stock price. Its shares are down more than 43% this year. After the layoffs were announced Tuesday, premarket shares rose over 1%, but they were down again by 1.57% as of midday trading.
HubSpot’s layoffs are part of a broader trend across the tech industry. In March, Atlassian cut 10% of its staff, about 1,600 jobs, to fund AI investments. Oracle announced three major layoffs in March, June, and September, losing tens of thousands of jobs as it pivoted toward AI. Salesforce cut about 4,000 customer service jobs in late 2025 and made additional cuts earlier this year. Workday eliminated 400 support roles in February and another 2.5% of its staff at the end of September. Some company leaders have suggested that AI efficiencies allow them to do more with less, fueling fears of workers being replaced by AI. But HubSpot’s situation may be different: investors worry that AI could replace the product itself, not just the people who build it.
Some executives, including OpenAI’s Sam Altman, have accused tech companies of engaging in «AI washing,» or falsely blaming AI for corporate layoffs. HubSpot’s decision to explicitly deny that AI drove the cuts may reflect an awareness of that criticism. Still, the company’s restructuring is unfolding against a backdrop of rapid AI adoption across the enterprise software sector, where companies are under pressure to demonstrate that they can compete in an AI-first market. For HubSpot, the challenge is twofold: convincing investors that its product remains essential in an AI-driven world, and managing a leaner organization while navigating that transition.