New Delhi, October 13 (IANS). Sridhar Vembu, chief scientist and co-founder of software company Zoho, said on Tuesday that the company has decided not to give the usual pay hike to employees this year due to rising costs and uncertain business conditions. He told that the company has also cut its marketing budget.
In a post on social media platform
He pointed out that the prices of servers required for data centers have increased almost four times. Also, the use of AI is increasing rapidly, which has also led to a significant increase in operating expenses. Apart from this, global geopolitical conditions also remain a challenge for business.
Vembu said, “We have cut our marketing budget. We have also told the employees that it will not be possible to give normal salary increases this year. I apologize to them for not being able to postpone it.”
He further said that the company will do its best to avoid large-scale layoffs, but the employment outlook in the software industry appears challenging at the moment. He said that Zoho has not made any significant increase in employee numbers in the last 18 months.
Vembu said that most of the employees understand the current circumstances and expressed his gratitude to them for the same.
He said, “We are in the process of reinventing ourselves. The next 3 to 5 years will decide how successful our transformation is.”
It is noteworthy that in May this year, Sridhar Vembu had also expressed concern over the increasing valuations of technology companies regarding AI. He said that investors' enthusiasm about Artificial Intelligence (AI) has taken the valuations of many big tech companies to such a level that situations like dot-com bubble are visible.
At that time, he mentioned companies like Nvidia, Apple, Alphabet, Microsoft, Meta Platforms and Micron Technology, saying that many of these companies are trading at very high valuations compared to their annual revenues.
Vembu also cited a statement by Scott McNeely made after the dot-com era, which stated that if investors valued a company at ten times its annual revenues, the company would have to perform exceptionally well over a long period of time to justify that valuation.
–IANS
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