Original Coverage & Source Attribution: www.livemint.com
Layoffs have become a normal feature of the software-as-a-service (SaaS) industry, but Zoho has chosen a different approach, according to the company’s founder and chief scientist, Sridhar Vembu.
Earlier this week, Vembu said Zoho had reduced its marketing budget, would not be able to provide its usual salary increases this year and was making efforts to avoid mass layoffs.
Responding to job cuts at SaaS competitor Airtable, Vembu said, “This is normal in SaaS. This is what we have refused to do.”
Zoho plans to retrain employees as AI changes productivity
Vembu said Zoho intends to retrain employees and redeploy them to new products or customer-facing roles when AI-driven productivity allows smaller teams to perform more work.
“Our business is growing but there is a lot of pressure on the cost side (data center and AI costs). We have chosen a different approach than VC-funded and public companies. We will see in 2030,” he said.
His comments outline Zoho’s approach to managing the impact of AI on its workforce. Rather than responding to productivity gains through job cuts, the company is seeking to move employees into other areas of the business.
Rising AI costs weigh on software business outlook
Vembu had earlier said the outlook for the software industry was uncertain, with AI adding significantly to costs, particularly through server prices, data storage and increased AI usage. He also said the geopolitical backdrop had made the situation more difficult.
Zoho has not increased its employee strength over the past 18 months, Vembu said. The company is also working through a broader restructuring of its business and strategy.
“We are in the middle of reinventing ourselves. The next 3-5 years will decide how our reinvention has worked,” he said.
Vembu’s reference to 2030 points to the three-to-five-year period he has outlined for Zoho’s reinvention.
Tech companies grapple with AI-led workforce changes
Zoho and Airtable are among the software companies navigating uncertainty as AI changes how teams operate and how businesses manage costs.
Thousands of workers have been laid off in recent months at companies including Amazon, Apple, Netflix, Xbox, Oracle, Microsoft and Meta.
The developments highlight the different ways technology companies are responding to AI-driven changes in productivity and operating costs. Zoho, according to Vembu, is attempting to manage these pressures through employee retraining and redeployment while working to avoid mass layoffs.
