Zoho founder Sridhar Vembu recently criticized the layoff of 660 employees by Software company Freshworks. Remarking that US corporate culture is sadly followed in India, Vembu said why are companies lacking in curiosity and vision. If the positions have gone redundant in the present condition, he argued why companies don’t invest in a different line of business and deploy those employees instead of sacking them.
“I can understand the unfortunate reality of layoffs when a business is struggling or declining and making a loss,” the Zoho boss tweeted. “This is not that situation, this is naked greed, nothing less,” he added.
Vembu remarked that a company with $1 billion cash, about 1.5 times its annual revenue, growing at a decent 20 percent rate and making a cash profit, is not expected to lay off 12-13 percent of its workforce. Moreover, it could afford $400 million in a stock buyback but still did not try to deploy employees by investing in a new line of business.
Vembu questions 'leadership'
“Here is a critical question to its leadership,” he said. “Don't you have the vision and imagination to invest $400 million in another line of business where you can deploy those people you hired but you don't want anymore?”
The Chennai/US-based IT company Freshworks announced a 13 percent dismissal of its global workforce on Wednesday impacting 660 employees. About 400 employees will be sacked from India alone.
Incidentally, Girish Mathrubootham, the founder of Freshworks had been an employee at Zoho. Both Zoho and Freshworks provide Software as a Service (SaaS).
“This is why choose to remain private,” Vembu concluded. “We put our customers and employees first. Shareholders should come last.”
Also read: Aman Gupta Says boAt Is Heading for Global Leadership in Audio Sector (startuppedia.in)
/startuppedia/media/media_files/2024/11/08/AUx3DAqLen6XNZ5DkcZF.jpeg)