Sridhar Vembu, the founder of Zoho, reportedly criticised Freshworks, saying that a company with over $1 billion in cash on hand should not expect its employees to stay loyal if it prioritised shareholders by announcing a buyback and implementing layoffs.
Zoho Sridhar Vembu’s Critical Comments
“A business with $1 billion in cash, or roughly 1.5 times its yearly revenue, that is still growing at a respectable 20 percent rate and turning a profit, while firing 12–13 percent of its people, could never expect loyalty from its workers. On November 8, Vembu posted on X, “And, to make matters worse, when it can afford $400 million in a stock buyback.”
“When a business is having trouble or is going down and losing money, I can appreciate the sad reality of layoffs. That is not the case here; this is nothing less than blatant greed,” he continued.
Although he did not specifically mention Freshworks in his X post, it was obvious what he was implying given that his harsh criticism was made the day after Freshworks’ earnings and shocking layoffs of 660 employees, despite the company’s announcement of a $400 million buyback, which caused its shares to soar 28% in US markets on Thursday.
Zoho CEO added
Additionally, Vembu subtly questioned the major listed on the Nasdaq. “Don’t you have the foresight and creativity to put $400 million into a different industry where you can use the employees you hired but no longer need? Is the tech industry devoid of such opportunities? Do you really lack imagination, vision, and curiosity? Do you really lack empathy?
This is why Zoho decided to stay private, the company’s founder continued. “We prioritise our clients and staff. He went on to say, “Shareholders should come last.”
On November 7, Dennis Woodside, the CEO of Freshworks, a firm listed on the Nasdaq, said that the company would reduce its staff by 13 percent, resulting in the layoff of about 660 employees. The change is a component of the SaaS company’s strategic aims, which centre on increasing productivity and decreasing team complexity.
Since 2024, the company, which employs over 5,000 people, has gone through several waves of layoffs and management changes.
As part of a significant management change in May, Dennis Woodside was appointed as the company’s new executive chairman, replacing Girish Mathrubootham, the former CEO of Nasdaq-listed Freshworks.
Freshworks and Zoho have a tumultuous and contentious past. Before founding Freshworks in 2010, Girish Mathrubootham was employed at Zoho.Since March 2020, when Zoho launched a lawsuit accusing Freshworks of stealing its proprietary data, the firms have been at odds.
When Freshworks acknowledged that a former employee had improperly accessed and utilised Zoho’s private sales lead data, the two parties reached a settlement in 2021.
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Shubhangi Gupta is a distinguished content writer and the visionary founder of The Unpleasant – Acha Nahi Sabse Sacha. With a Master’s degree in Commerce from University of Lucknow, Shubhangi has seamlessly blended her academic background with her passion for reading and writing, embarking on a successful career as a content writer since 2019.
