Zoho Corporation co-founder Sridhar Vembu has announced that the company will not offer salary increments to employees this year, citing rising costs and the growing expenses associated with artificial intelligence (AI). His decision has received flak on social media, with users questioning his appeal to Indians working in the US to return home and contribute to the country’s technology sector.
In a post on X, attributed the decision to “global geopolitical tensions” and the rapid “advancement of AI”. He apologised to employees for being unable to offer annual pay hikes and said the company would make every effort to avoid large-scale layoffs.
‘We will work hard to avoid mass layoffs’
“The business outlook for software is uncertain, and AI has raised costs dramatically. There has been a massive fourfold increase in server prices, which we need for data centres. s also increasing rapidly, leading to much higher expenses, which we are trying to control.
“On top of that, we are facing a challenging geopolitical backdrop.
“We have cut down on our marketing budget. We have also told our employees that we cannot offer our usual pay increases this year. I have apologised for being unable to avoid this.
“We will work hard to avoid mass layoffs, but the outlook for software jobs in general is grim. We have not increased our employee count in the past 18 months.
“Most of our employees understand the situation, and I am thankful to them.
“We are in the middle of reinventing ourselves. The next three to five years will determine how successful our reinvention has been. Please pray for us,” Vembu wrote.
However, his remarks have drawn criticism from social media users, who questioned the job prospects for Indians returning from overseas amid challenges facing the domestic technology industry. Some also pointed to Zoho’s own financial pressures, rising expenses and uncertainty over future employment.
Earlier on Tuesday, hours after announcing the decision to withhold annual increments, Vembu urged Indians facing an uncertain future in the US to consider returning to their home country.
How social media users reacted:
“When another country tells you to go home, you come home. What is the alternative? Beg them to allow us to stay? Stay illegally? There are a million things to build in India, even if software becomes saturated or goes away,” he wrote on X.
His appeal prompted several users to question whether India could provide sufficient employment opportunities for returning professionals, particularly in light of the challenges Vembu himself had outlined for the software industry.
AI mentor and educationist Sandeep Manudhane criticised what he saw as a contradiction between Vembu’s appeal to non-resident Indians (NRIs) and Zoho’s current business challenges.
“He [Sridhar Vembu] is on the verge of mass layoffs at his own company while constantly urging NRIs to return immediately to build a New India. Unreal,” Manudhane wrote on X.
Another user acknowledged Zoho’s achievements but expressed concern over the company’s recent announcements.
“Don’t get me wrong. I have deep respect for Zoho and Sridhar Vembu for what they have built. Zoho is a poster child for Indian software companies, proving that we can build global businesses from India,” the user said.
A third user questioned Vembu’s appeal in light of the company’s hiring and compensation decisions.
“Sir, you are now saying that you have not increased your employee count in 18 months and are unsure whether there will be layoffs. Your call for overseas Indians to return to India is not very reassuring, given these updates,” the user wrote.
Another social media user challenged Vembu’s message, citing the difficulties faced by businesses and workers in India.
“Is this the same person who is calling NRIs to return to India? You are struggling to grow your business, underpaying employees, cutting jobs and barely surviving. So are most businesses in India, given the current market conditions. Yet you are asking people to return. The hypocrisy is astonishing,” the user wrote.
Another user interpreted Vembu’s comments about the software industry’s outlook as a warning for employees.
“Vembu sir is indirectly telling us to get ready for layoffs.
“It’s time for everyone to understand that we should step away from the workforce and start living the life we want,” the user wrote.