In a scathing tweet that’s drawn attention from the tech industry and beyond, Zoho CEO Sridhar Vembu has voiced strong criticism against companies that lay off workers while simultaneously engaging in stock buybacks. In an apparent criticism of Freshworks, the company that recently laid off 13% of its global workforce, Vembu remarked that a company with $1 billion in cash and about 1.5 times its annual revenue, that is growing at a healthy 20% rate and making a profit, yet chooses to lay off 12-13% of its workforce, should not expect any loyalty from its employees ever.
Vembu described the layoffs as a form of “naked greed,” suggesting that these actions are not a result of financial distress but rather a callous decision aimed at boosting stock prices and satisfying shareholders, with little regard for the people who contributed to the company’s success.
“To add insult to injury,” Vembu said, the same company that is cutting jobs is simultaneously affording $400 million in a stock buyback. The stark contrast between these two actions—the shedding of employees versus enriching shareholders—reflects what Vembu sees as an unhealthy trend in modern corporate culture.
Vembu, further his tweet, posed a question for company leadership as well where he asked, “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?” In other words, if a company has the financial resources to buy back its own stock, why not explore new business opportunities or invest in areas where employees who are let go could be redeployed? Vembu, in his post, quite frankly argues that leaders should have the foresight and creativity to find solutions that don’t involve the wholesale reduction of their workforce.
The Zoho ZEO also expressed frustration at what he sees as a lack of empathy in corporate decision-making. “Are you so lacking in curiosity, vision and imagination? Are you so lacking in empathy?” he asked, implying that the leadership’s failure to consider alternative ways of using its resources reveals a deep disconnect between the executives and the employees.
Another aspects that Vembu criticised in his tweet was the growing cynicism in the corporate world, particularly in the US. He believes that this type of behavior, rooted in short-term profit maximization, has led to a sense of alienation and distrust among employees and is now being imported in India. He writes, “This behavior, sadly, has become all too common in the US corporate world and we are importing it in India. It has only resulted in large-scale employee cynicism in the US and we are importing that too.”
In the U.S., tech giants like Meta, Amazon, and Google have been in the spotlight for laying off tens of thousands of workers while simultaneously repurchasing billions of dollars in stock. These moves have drawn significant backlash from workers and the public, many of whom see these actions as a betrayal of the very people who helped build the companies to their current size.
While India has long been known for its entrepreneurial spirit and its emphasis on employee loyalty, the rise of global business practices, especially in the tech sector, has introduced a more transactional approach to labor relations. Vembu suggests that this could lead to a similar sense of cynicism among Indian employees as well.
Vembu, at last added, Zoho has chosen to remain a privately held company, and Tembu made it clear that the decision to stay private is rooted in a desire to prioritize customers and employees over shareholders. “This is why we choose to remain private,” he wrote. “We put our customers and employees first. Shareholders should come last.”