Zoho’s Sridhar Vembu calls SaaS layoffs ‘normal’, bets on reinvention by 2030 | Today’s news
Layoffs have become a common part of the software-as-a-service (SaaS) industry, but Zoho has taken a different approach, according to company founder and chief scientist Sridhara Vembu.
Earlier this week, Vembu said that Zoho had cut its marketing budget, would not be able to deliver the usual salary increases this year and was trying to avoid mass layoffs.
Reacting to layoffs at SaaS competitor Airtable, Vembu said: “That’s normal in SaaS. That’s what we refused to do.”
Zoho plans to retrain employees as AI changes productivity
Vembu said Zoho intends to retrain employees and move them into new product or customer-facing roles as AI-driven productivity allows smaller teams to do more work.
“Our business is growing, but there is a lot of pressure on the cost side (data center and AI costs). We have taken a different approach than VC-funded companies 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 by cutting jobs, the company tries to move employees to other areas of the business.
The rising cost of artificial intelligence is affecting the outlook for the software business
Vembu has previously said that the outlook for the software industry is uncertain as AI significantly increases costs, particularly through server prices, data storage and increased use of AI. He also said that the geopolitical background made the situation difficult.
Zoho has not increased its staff strength in the last 18 months, Vembu said. The company is also working on a broader restructuring of its business and strategy.
“We are in the midst of reinventing ourselves. The next 3-5 years will determine how our reinvention has worked,” he said.
Vembu’s reference to 2030 points to the three- to five-year timeframe he outlined for Zoho’s reinvention.
Tech companies are grappling with AI-led workforce changes
Zoho and Airtable are among software companies navigating uncertainty as artificial intelligence changes how teams work 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 development highlights the different ways technology companies are responding to changes in productivity and operating costs brought about by artificial intelligence. According to Vembu, Zoho is trying to manage these pressures by retraining employees and moving them on the job to avoid mass layoffs.
