Chennai: Zoho is skipping pay hikes and appraisals to avoid layoffs amid challenging market conditions, said the company’s chief executive Mani Vembu. In an X post on Thursday, pointing out a sharp increase in server costs and other costs, he said that the company took a tough decision to avoid layoffs and price increases.Zoho founder and chief scientist Sridhar Vembu faced severe criticism after he announced the company’s decision to pause pay hikes. Explaining the decision, Mani Vembu said the decision was based on the company’s priorities for customers and employees.“While layoffs are common across businesses, we felt it was not the right choice when our business is still growing. We have over a million customers to support and products to keep improving. Cutting jobs could affect both employees and customers. Instead, we want to reduce costs by focusing on R&D to make our products and infrastructure more efficient,” he said.Vembu added that the company has decided to cut its marketing spend and is looking for ways to improve efficiency across the business, but decided not to raise prices when customers are already dealing with rising costs and geopolitical uncertainty. “Every software business will be having this discussion and making difficult choices. These are real-world situations where there is no single right answer…Ultimately, it comes down to what we choose to prioritise and how we balance the needs of our customers, employees and business for the long term,” he added.He said the company made a similar decision during COVID and offered free licences to customers, even though it meant losing revenue.
