New Delhi, Oct 13: Zoho Corporation has put its yearly salary increments on hold and cut its marketing budget, with founder Sridhar Vembu pointing to a sharp rise in AI infrastructure costs and a murky outlook for the software industry.
Vembu announced the measures in a post on X on Tuesday. He said server prices, which the company needs for its data centres, have jumped roughly fourfold. Rapidly growing AI usage has also driven up expenses, which the company is trying to rein in. He added that a difficult geopolitical environment has made matters worse.
Employees have been told there will be no usual pay raise this year. Vembu apologised for being unable to avoid the decision and thanked staff for their understanding.
Zoho has kept its headcount flat for the past 18 months. Vembu said the company will do all it can to avoid mass layoffs, though he described the job outlook for the software sector as grim.
Calling this a period of reinvention for Zoho, he said the next three to five years will determine whether the strategy works.
The report did not say how large the marketing cut is, nor did it give details on Zoho’s financial performance or whether the pay freeze covers all employees.