Zoho's Sridhar Vembu says no pay hikes this year, warns software jobs outlook is grim
Zoho Chief Scientist Sridhar Vembu has said the company will not provide its usual salary increases this year, citing rising artificial intelligence (AI) expenses, a fourfold increase in server prices and uncertainty surrounding the software industry. In a post on X, Vembu said the company had reduced its marketing budget and was working to control costs amid a challenging geopolitical environment.
“The business outlook for software is uncertain and AI has raised costs dramatically with a) massive 4-fold increase in server prices which we need for data centers b) AI usage increasing rapidly, leading to much higher expenses, which we are trying to control,” Vembu wrote.
He apologised to employees over the decision to withhold the usual pay increases and warned that employment conditions across the software sector remained difficult. He also said Zoho had not increased its employee count for 18 months.
Sridhar Vembu explains decision to hold back salary hikes
Explaining the company's position, Vembu said rising infrastructure costs and increased AI usage were putting pressure on spending. The company relies on servers for its data centres, while growing AI usage has added to operating expenses.
“On top of that is the challenging geopolitical backdrop.
“We have cut down on our marketing budget. We have also told our employees that we cannot have our usual pay increase this year. I have apolgized for not being able to avoid this.”
Vembu did not disclose the total increase in Zoho's AI-related expenditure or specify how many employees would be affected by the salary decision.
Zoho aims to avoid mass layoffs amid software jobs concerns
Vembu said the company would make efforts to prevent large-scale job cuts despite the uncertain outlook.
“We will work hard to avoid mass layoffs but the outlook for software jobs in general is grim. We have not been growing our employee count for 18 months now.”
He added that most employees understood the circumstances and expressed gratitude for their support.
“Most of our employees understand the situation. I am thankful to them.”
His remarks come amid wider industry discussions about AI's potential to change software development, business costs and workforce requirements.
Zoho's next three to five years to test reinvention
Vembu said Zoho was undergoing a transformation as it adjusted to changing market conditions and technology costs.
“We are in the middle of reinventing ourselves. The next 3-5 years will decide how our reinvention has worked. Please pray for us ??”
Vembu criticises universal basic income
In a separate post on X on October 12, 2026, Vembu criticised universal basic income (UBI), describing it as an “unimaginative and dystopian vision of the intellect-worshipping modern man”.
He argued that AI's growing capabilities could put intellectual jobs, including software-related roles, at risk. He also questioned the assumption that guaranteed income should be the primary response to technological displacement.
Vembu suggested that activities involving environmental restoration, childcare, elder care, music, festivals, sports and spiritual traditions could remain meaningful sources of work and income.
He also challenged assumptions about ownership of productive resources, writing: “The UBI future implicitly assumes monopolisation of the means of production and sovereign states already have the power to disallow monopolies.”
“The business outlook for software is uncertain and AI has raised costs dramatically with a) massive 4-fold increase in server prices which we need for data centers b) AI usage increasing rapidly, leading to much higher expenses, which we are trying to control,” Vembu wrote.
He apologised to employees over the decision to withhold the usual pay increases and warned that employment conditions across the software sector remained difficult. He also said Zoho had not increased its employee count for 18 months.
Sridhar Vembu explains decision to hold back salary hikes
Explaining the company's position, Vembu said rising infrastructure costs and increased AI usage were putting pressure on spending. The company relies on servers for its data centres, while growing AI usage has added to operating expenses.
“On top of that is the challenging geopolitical backdrop.
“We have cut down on our marketing budget. We have also told our employees that we cannot have our usual pay increase this year. I have apolgized for not being able to avoid this.”
Vembu did not disclose the total increase in Zoho's AI-related expenditure or specify how many employees would be affected by the salary decision.
Zoho aims to avoid mass layoffs amid software jobs concerns
Vembu said the company would make efforts to prevent large-scale job cuts despite the uncertain outlook.
“We will work hard to avoid mass layoffs but the outlook for software jobs in general is grim. We have not been growing our employee count for 18 months now.”
He added that most employees understood the circumstances and expressed gratitude for their support.
“Most of our employees understand the situation. I am thankful to them.”
His remarks come amid wider industry discussions about AI's potential to change software development, business costs and workforce requirements.
Zoho's next three to five years to test reinvention
Vembu said Zoho was undergoing a transformation as it adjusted to changing market conditions and technology costs.
“We are in the middle of reinventing ourselves. The next 3-5 years will decide how our reinvention has worked. Please pray for us ??”
Vembu criticises universal basic income
In a separate post on X on October 12, 2026, Vembu criticised universal basic income (UBI), describing it as an “unimaginative and dystopian vision of the intellect-worshipping modern man”.
He argued that AI's growing capabilities could put intellectual jobs, including software-related roles, at risk. He also questioned the assumption that guaranteed income should be the primary response to technological displacement.
Vembu suggested that activities involving environmental restoration, childcare, elder care, music, festivals, sports and spiritual traditions could remain meaningful sources of work and income.
He also challenged assumptions about ownership of productive resources, writing: “The UBI future implicitly assumes monopolisation of the means of production and sovereign states already have the power to disallow monopolies.”
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