Key Points
- Zoho founder Sridhar Vembu criticizes Freshworks for laying off 660 employees despite 22% revenue growth.
- Vembu condemns corporate greed, saying it’s spreading from the U.S. to India.
- Freshworks announced layoffs while holding onto a $1 billion cash reserve and maintaining 20% growth.
- Vembu questions Freshworks’ choice to use $400 million for a stock buyback instead of investing in new business opportunities.
- Zoho puts employees first, with Vembu arguing that prioritizing shareholders hurts company morale.
Looma News
Zoho founder Sridhar Vembu has sharply criticized Freshworks for laying off 660 employees despite the company’s impressive 22% revenue growth. Vembu took to social media to call out what he sees as the “naked greed” of corporate America, which he believes is now making its way into Indian companies. While Freshworks saw a rise in revenue, the company also announced a major 13% workforce reduction, a move Vembu condemned as short-sighted.
Vembu did not directly name Freshworks in his post, but pointed out the trend of businesses cutting jobs while staying profitable and holding large cash reserves. He noted that a company with $1 billion in cash and a 20% growth rate should not be laying off employees. “A company that has $1 billion cash… and is actually still growing at a decent 20% rate… laying off 12-13% of its workforce should not expect any loyalty from its employees ever,” he said. He also took issue with Freshworks’ decision to use $400 million for a stock buyback, questioning why the company didn’t invest that money in new business opportunities or use it to keep jobs intact.
Freshworks defended its actions, explaining that the layoffs were part of an effort to “streamline operations” across its U.S., India, and other global offices. However, Vembu argued that companies with enough cash should look for new opportunities or simply pause hiring, rather than turning to layoffs. He also pointed out that Zoho, being a private company, doesn’t face the same shareholder pressures as publicly traded companies. “We put our customers and employees first. Shareholders should come last,” Vembu said, stressing that the “shareholder first” mentality commonly seen in public companies damages employee morale and isn’t sustainable in the long run.
