Zoho’s Sridhar Vembu calls SaaS layoffs ‘normal’, bets on reinvention by 2030
Zoho founder Sridhar Vembu says layoffs are common in the SaaS industry, but the company is trying to avoid mass job cuts by retraining employees and redeploying them as AI reshapes productivity and raises data centre and computing costs.
Zoho's founder and chief scientist, Sridhar Vembu, has stated that software-as-a-service (SaaS) layoffs are becoming a "normal" part of the industry. Earlier this week, Vembu revealed that Zoho had cut its marketing budget and will not be able to provide usual salary increases this year, while 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."
Vembu believes Zoho will retrain employees and redeploy them to new products or customer-facing roles as 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)," he said. The company is positioning itself differently than VC-funded and public companies, focusing on reinvention rather than cost-cutting.
Vembu acknowledged the uncertain outlook for the software industry due to AI's increasing costs and the geopolitical backdrop. Zoho has maintained its employee count over the past 18 months and is undergoing a broader restructuring of its business and strategy. The company is currently in the middle of reinventing itself, with the next 3-5 years crucial for determining the success of this transformation.
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