Zoho founder and chief executive Sridhar Vembu has publicly acknowledged that his home‑grown software‑as‑a‑service (SaaS) firm is feeling financial strain as artificial‑intelligence (AI) technologies drive up operating expenses. While competitors have turned to workforce reductions, Vembu said Zoho will keep its employees and instead invest in upskilling them for new product roles and customer‑support functions.
Contrast with rival Airtable’s layoff announcement
Vembu’s comments came after Airtable, a spreadsheet‑and‑database platform now owned by Bending Spoons, announced a sizable layoff. The product leader at Bending Spoons, Federico Simionato, posted on X that Airtable would be “laying off a large part of the Airtable team,” describing the move as a shift toward smaller teams that ship more efficiently. The acquisition of Airtable for $1.28 billion in August this year preceded the layoff notice, though the exact number of jobs affected was not disclosed.
Vembu highlighted that such reductions are “normal in SaaS” but emphasized that Zoho has deliberately chosen a different path. He argued that firing workers simply because AI can increase productivity would be a short‑sighted response, and that the company’s strategy is to retrain staff so they can contribute to new products or improve customer outcomes.
Internal cost‑saving measures at Zoho
In a separate X post a few days earlier, Vembu said Zoho was working to avoid mass layoffs despite mounting cost pressures. He confirmed that the firm had cancelled its annual performance appraisals and told employees that the usual pay increase would not be provided this year. The decision reflects rising expenses tied to data‑centre operations and AI‑related infrastructure, which Vembu described as “a lot of pressure on the cost side.”
Despite those pressures, Vembu noted that Zoho’s business continues to grow. He contrasted Zoho’s approach with that of many venture‑capital‑backed and publicly listed tech firms that have opted for workforce cuts. By choosing to retain staff and focus on retraining, Zoho aims to position itself for longer‑term competitiveness in an AI‑driven market.
Long‑term outlook and industry context
Vembu said the impact of Zoho’s strategy may only become clear by the end of the decade, stating “we will see in 2030.” He has previously spoken about a plan to “reinvent” Zoho for the AI era, a transformation he expects to unfold over the next five years. The company has not added to its headcount in the past 18 months and has trimmed its marketing budget, indicating a disciplined approach to cost management while preserving talent.
The broader technology sector is experiencing a wave of layoffs. Major players such as Microsoft, Meta, Oracle and Tata Consultancy Services (TCS) have collectively dismissed thousands of employees in recent months. According to the layoff tracker Layoffs.fyi, more than 131,000 tech workers lost their jobs in 2026 alone. Netflix, the streaming giant, recently announced cuts affecting roughly 1,000 staff members.
Against this backdrop, Zoho’s decision to forego layoffs stands out as a divergent tactic. By emphasizing employee retraining rather than reduction, the company signals confidence in its growth trajectory and a belief that a skilled workforce will be essential for delivering AI‑enhanced products and services in the years ahead.
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