Sridhar Vembu freezes salary hike: From losing 80% clients overnight to making billion-dollar business
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓Zoho founder Sridhar Vembu put annual salary hikes on hold due to an uncertain business outlook and rising AI costs.
- ✓He said, "We have also told our employees that we cannot have our usual pay increase this year." The company also cut marketing budgets to manage these high expenses effectively.
Story at a Glance
- Category
- BUSINESS
- Reported By
- Livemint
- Reading Speed
- 8 Minute(s)
- Market Focus
- India Economy
Sridhar Vembu, founder of software giant Zoho Corporation, is taking a cautious approach amid an uncertain business outlook and rising artificial intelligence (AI) infrastructure costs. The company has put its annual salary hikes on hold and cut back on marketing expenditure.
A pioneer in bootstrapped, capital-efficient B2B SaaS (Software-as-a-Service), Vembu said, "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 apologised for not being able to avoid this."
Citing the reasons behind the move, Vembu said, "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. On top of that is the challenging geopolitical backdrop."
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