HubSpot is cutting about 7% of its workforce, or roughly 660 employees, as it restructures into what CEO Yamini Rangan described as a "flatter organization" with fewer management layers. Rangan said the layoffs were "not driven by AI-related efficiencies," though AI remains central to HubSpot's strategy as the company adjusts its organization around AI-driven customer outcomes. Fast Company reports: 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.

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, artificial intelligence 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 packages. 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 they will be allowed to keep their laptops.

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