HubSpot layoffs to affect 660 employees at Cambridge-based company amid AI shift

Cambridge, Massachusetts-based tech company HubSpot announced major layoffs on Tuesday, saying that it needs to pivot to a new AI-focused strategy.

HubSpot CEO Yamini Rangan shared the "very difficult news" in a letter to employees that said about 660 workers will be laid off, which amounts to a 7% staff reduction.

"Over the past year, we have shifted our strategy from building software that helps customers grow to delivering outcomes for them with AI," Rangan wrote. "That shift is transforming product, pricing and how we serve our customers."

Rangan said "we need to move faster" and announced organizational changes that include fewer management layers. She did note that the layoff decision "is not driven by AI-related efficiencies."

"We believe in a world where AI helps make us more productive and we will continue to invest to make that happen," she said. "This change is about aligning our organization with our strategy and how we need to operate going forward."

Employees will get 20 weeks of base pay, plus a week per year of service, up to 30 weeks, in severance. They'll also receive five months of healthcare benefits and career support.

In an August earnings report, HubSpot said revenue was up 20% to nearly $912 million for Quarter 2, with Rangan saying "we made deliberate choices to accelerate our AI transformation."

"The AI shift unlocks a much larger opportunity for HubSpot, and I'm confident these choices position us to drive long-term, compounding growth," she said at the time.