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Zoho Founder Sridhar Vembu Reacts To AI Layoffs And Explains Retraining Strategy
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Firstpost•15-10-2026, 06:39
Zoho Founder Sridhar Vembu Reacts To AI Layoffs And Explains Retraining Strategy
- •Zoho founder Sridhar Vembu stated that the company chooses to retrain employees for new products and customer support rather than resorting to AI-driven layoffs.
- •Vembu highlighted that while smaller teams enabled by AI productivity are becoming the norm, Zoho follows a different path compared to venture-backed and public companies.
- •Zoho recently decided to withhold its usual annual salary increases due to surging AI and server costs, alongside an uncertain software industry outlook.
- •Despite freezing hiring for 18 months and reducing marketing budgets to control spending, Vembu aims to avoid mass layoffs at the company.
Key Questions Answered
While other technology companies resort to workforce reductions when AI productivity enables smaller teams, Zoho chooses to retrain its employees and deploy them onto new products or customer support roles.
Zoho suspended its annual salary increases due to dramatically rising AI expenses, a fourfold increase in server prices for data centres, and an uncertain outlook for the software industry.
To control rising operational expenses driven by AI and server demands, Zoho has cut its marketing budget and maintained a flat employee count for 18 months while working to avoid mass layoffs.
