Zoho CEO Sridhar Vembu Criticises Freshworks Layoffs

Zoho founder and CEO Sridhar Vembu came down heavily on SaaS (Software as a Service) platform Freshworks via a social media post. The criticism comes following tech platform’s decision to cut its workforce by 13% affecting nearly 660 employees globally.

Calling out what he sees as “naked greed” in corporate America creeping into India, Vembu said in a social media post, “This behavior, sadly, has become all too common in the US corporate world, and we are importing it in India.”

Though Vembu didn’t name the company openly, his post indirectly criticised the developments at the Chennai-based Saas major. He expressed his disagreements reiterating that a company despite being profitable and holding satisfactory cash reserves decided to lay off its workers. He said, “A company that has $1 billion cash… and is actually still growing at a decent 20% rate… laying off 12-13% of its workforce should not expect any loyalty from its employees ever.”

Vembu also condemned Freshworks’ $400 million buyback stating, “Don’t you have the vision to invest $400 million in another line of business where you can deploy those people you hired?” he questioned, adding, “Are you so lacking in curiosity, vision, and empathy?”

He insisted that companies with ample cash could pause hiring or explore new projects instead of laying off workers. Notably, Freshworks reported a revenue of $186.6 million in Q3.

As per a social media post on X, Vembu said, “This private equity and Wall Street-led ‘shareholder first’ world does not work and won’t even work out well for shareholders.”

Touching on the Friedman Doctrine, which promotes profit maximisation, Vembu criticised the ‘use and throw’ culture underscoring that ‘People don’t like to be treated that way’. He concluded that this approach leading to cynicism and deep divisions is socially unsustainable.