Business
Zoho freezes pay hikes citing 4-fold server costs
Livemint··3d ago
Zoho founder Sridhar Vembu said the company paused usual annual pay increases and cut marketing spending. He cited an uncertain software outlook and AI costs, including a 4-fold rise in server prices for data centres. Vembu apologised to employees and said Zoho is reinventing itself. He said the firm will work to avoid mass layoffs over the next 3-5 years.
Prism
What It Means For You
- Zoho employees were told there will be no usual pay increase this year, Vembu said.
- Marketing budgets have been cut as the company tries to control higher AI usage expenses.
- Vembu said Zoho will work hard to avoid mass layoffs during the reinvention period.
What's Happening
- Vembu linked the freeze to higher AI infrastructure costs and a challenging geopolitical backdrop.
- He said the next 3-5 years will show whether the reinvention has worked.
- Livemint reported the comments as Zoho takes a cautious approach to rising AI costs.
How Zoho Grew Without Outside Capital
- Vembu began building Zoho in the 1990s from a small apartment in suburban Chennai.
- The company, once called AdventNet, became a ₹1,00,000-crore multinational, the report said.
- Zoho is often described as a bootstrapped, capital-efficient B2B SaaS firm.
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