- HubSpot is eliminating about 660 positions, or 7% of its workforce, as the software company reorganizes around AI-powered customer outcomes and a flatter management structure.
HubSpot Inc. (NYSE: HUBS) is cutting roughly 7% of its global workforce, or nearly 660 employees, as the customer relationship management software company restructures its organization around a broader artificial intelligence strategy.
Chief Executive Yamini Rangan announced the changes to employees on Oct. 6, saying HubSpot had shifted its strategy from building software that helps customers grow toward delivering business outcomes through AI. The company said the restructuring will change its product organization, pricing strategy and approach to serving customers.
The cuts were first reported by The Information, which said HubSpot plans to eliminate management layers and reorganize product teams. HubSpot's official announcement said the reductions are not simply a cost-cutting exercise. Rangan also said the layoffs are not the result of HubSpot using AI to replace work previously performed by employees.
That creates an important distinction between the cause of the restructuring and the technology driving it. HubSpot is changing how it operates because AI is changing its products and the expectations of its customers, while the company says the eliminated roles are not simply jobs being automated by internal AI tools.
Why HubSpot Is Cutting 660 Jobs
HubSpot's board authorized the restructuring plan on Oct. 1, according to a regulatory filing with the US Securities and Exchange Commission. The filing says the plan affects approximately 7% of employees and is intended to create a flatter organization while aligning resources with the company's long-term growth and profitability objectives.
HubSpot expects the restructuring to produce between $65 million and $75 million in charges, primarily related to severance, employee transition costs, notice periods and benefits. Most of the expenses are expected to be recognized during the fourth quarter of 2026, with the workforce reductions expected to be substantially completed by the end of the first quarter of 2027, subject to local requirements.
The timing is notable because HubSpot is not shrinking a business that has stopped growing. The company reported $911.7 million in second-quarter revenue, an increase of 20% from a year earlier. Subscription revenue rose 20% to $894 million, while GAAP operating income reached $43.3 million compared with a $24.6 million loss in the year-earlier quarter.
HubSpot also ended June with 306,446 customers, up 14% year over year. The company had 9,016 employees at June 30, according to its investor-relations materials. Its full-year 2026 guidance, issued in August, called for revenue of $3.678 billion to $3.686 billion, representing 18% growth on an as-reported basis. HubSpot also forecast non-GAAP operating income of $762 million to $766 million.
The company has therefore framed the workforce reduction as an organizational shift rather than a response to collapsing demand. The restructuring also comes after HubSpot's recent AI product expansion. In September, the company introduced a rebuilt Breeze Assistant, a self-updating Smart CRM and other tools designed to use customer and business context to automate more work.
HubSpot's AI Strategy Puts Software Stocks Under Pressure
The restructuring arrives as investors continue to debate whether generative AI will strengthen established software companies or eventually reduce demand for traditional SaaS products. HubSpot has been particularly exposed to that debate because its core customers include small and midsize businesses. The Information noted that investors have questioned whether some of those customers could increasingly build software and CRM features themselves using AI tools.
HubSpot's strategy is instead to make AI part of its existing platform. The company said its new Breeze Assistant can help users create campaigns, develop landing pages and perform other go-to-market tasks, while its Smart CRM is designed to keep customer information updated automatically. HubSpot has also emphasized the value of combining its customer data with AI agents.
That approach reflects a broader shift across the software industry. Recent AI investment trends have increasingly focused on whether companies can turn AI spending into measurable revenue and productivity gains rather than simply adding AI features to existing products.
HubSpot's workforce reduction also follows a broader period of restructuring across technology companies. Salesforce, ServiceNow and Atlassian have all reduced staffing this year, according to The Information, as software companies adjust their organizations while investors reassess the economic impact of AI.
At the same time, the broader software market has recently shown signs of recovering from the initial AI disruption fears. Reuters reported Oct. 6 that US software stocks were reaching fresh 2026 highs as investors became more confident that AI could act as an enabler rather than simply a threat to established software businesses.
That makes HubSpot's restructuring particularly significant for HUBS stock. The company's shares have fallen more than 40% since the beginning of 2026, according to The Information, leaving investors focused on whether its AI strategy can restore confidence in the business.
HubSpot's recent AI product rollout reflects the same broader market question facing other software companies: whether AI can increase the value of established platforms quickly enough to offset concerns about changing software economics.
For HubSpot, the next test will be whether the flatter organization and increased emphasis on AI-powered customer outcomes translate into sustained revenue growth, stronger margins and greater customer adoption.
The company is still growing, but its latest restructuring shows that AI is changing not only what software companies sell, but how they organize themselves to compete.