HubSpot Axes 660 Jobs as AI Reshapes Company, Despite CEO Denying AI Is Behind Layoffs

HubSpot is cutting nearly 660 jobs, or about 7% of its workforce, as it reorganises around a strategy focused on delivering customer outcomes with artificial intelligence. CEO Yamini Rangan said the workforce reduction was not driven by AI-related efficiencies.

Rangan said HubSpot had shifted from building software that helps customers grow to delivering outcomes for customers with AI. The change is affecting the company's products, pricing, and approach to serving customers. The restructuring is intended to create a flatter organisation with fewer management layers, and teams organised around customer outcomes rather than individual Hubs and features.

HubSpot Plans a Flatter Organisation

HubSpot's board authorised the restructuring plan on 1 October, according to a filing with the US Securities and Exchange Commission. The plan affects approximately 7% of the company's workforce and is designed to align the organisation with its evolving strategy.

Rangan said the company plans to reduce management layers and reorganise product teams around customer outcomes. HubSpot also plans to create teams with clearer ownership so employees can make decisions and execute with greater speed and clarity.

HubSpot expects to incur between $65 million and $75 million in restructuring charges. The costs will primarily cover severance, notice periods, employee transition, and benefits payments, with most of the charges expected to be recognised in the fourth quarter of fiscal 2026.

The role reductions are expected to be substantially completed by the end of the first quarter of fiscal 2027, subject to local law and consultation requirements. Substantially all related cash payments are expected to be made by 30 June 2027.

AI Is Changing HubSpot's Strategy

Rangan said HubSpot had shifted its strategy over the past year towards delivering outcomes for customers with AI. 'That shift is transforming product, pricing and how we serve our customers,' she wrote. 'But we also need to fundamentally change the way we are organized to compete and win.'

However, Rangan explicitly rejected the idea that AI-related efficiencies were behind the job cuts. 'This is not driven by AI-related efficiencies,' she wrote. 'We believe in a world where AI helps make us more productive and we will continue to invest to make that happen.' She described the restructuring as 'not simply a cost-cutting exercise', saying HubSpot was changing where and how it invests to put more resources behind its biggest opportunities.

The distinction is central to the restructuring: HubSpot is changing its organisation as AI reshapes its products and business strategy, while the company says productivity gains from AI were not the reason for eliminating the roles.

HubSpot Cuts Come Amid Market Pressure

The layoffs come as software companies face growing questions about how artificial intelligence could affect traditional business models and staffing. HubSpot's shares have also fallen sharply this year. The stock closed at $220.61 on 5 October, down roughly 45% since the start of the year, according to reporting on the company's share price.

Despite the restructuring, HubSpot reaffirmed its revenue and non-GAAP operating income guidance for the third quarter and full year of fiscal 2026 in its restructuring filing. The company also said it remained confident in achieving its longer-term operating margin targets.

What Laid-Off Workers Will Receive

Employees leaving HubSpot will generally receive 20 weeks of base pay plus one additional week for each year of service, up to a maximum of 30 weeks. The company is also providing health benefits and six months of career-transition outplacement services, although the terms vary by region. Impacted employees may also keep their HubSpot laptops and work-from-home equipment, according to the company's employee announcement.

The restructuring is expected to cost up to $75 million. The charges will be included in HubSpot's GAAP results but excluded from applicable non-GAAP financial measures and guidance.