Technology
Zoho freezes pay hikes citing fourfold server costs
Business Standard··4d ago
Zoho founder Sridhar Vembu said staff will not get the annual salary increase this year. On October 13, 2026 he cited a fourfold rise in server prices, higher AI costs and an uncertain software market. He said marketing spending was cut and headcount has not grown for 18 months. He apologised and said Zoho would try to avoid mass layoffs.
Prism
What It Means For You
- Vembu said AI usage is rising quickly and raising expenses the firm is trying to control.
- He thanked employees for understanding what he called a crisis situation.
- He said the next three to five years would decide the company's reinvention.
What's Happening
- The comments were posted on X and reported by Business Standard on October 13, 2026.
- Vembu linked higher data-centre costs to the fourfold jump in server prices.
- He said the broader software jobs outlook was grim.
What Employees Were Told
- Zoho is a software-as-a-service company facing higher AI infrastructure costs.
- The freeze covers the usual annual pay increase, not a stated across-the-board cut.
- Vembu said the firm has already reduced its marketing budget.
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