Sridhar Vembu, co-founder of Zoho Corporation, has weighed in on the recent tech layoffs in major IT firms like TCS, Wipro and Infosys. Vembu criticised the entire software industry as “inefficient” and blamed it for the current “cyclical downturn” that it is facing. He also pointed out that the talent being let go could have been better utilised in other sectors.

Vembu’s comments follow a disappointing financial quarter for leading Indian IT companies such as Infosys, Tata Consultancy Services, and Wipro, all of which reported losses. The financial reports hint at a potential hiring slowdown across the IT sector and point to a tough year ahead. On top of that, new tariffs introduced by President Donald Trump during his Liberation Day speech on April 2 have further disrupted the sector by delaying fresh orders and hindering project ramp-ups, worsening the already uncertain industry.

In what he called his “operating thesis”, the 57-year-old said, “What we are seeing is not just a cyclical downturn, and it is not just AI-related,” before adding, “Even without the uncertainty induced by tariffs, there was trouble ahead.”

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He went as far as labelling the entire software industry as “inefficient” due to systemic flaws built over decades. According to him, the industry’s shortcomings are rooted in “asset bubble”, and unfortunately, India has mirrored many of these “inefficiencies”.

“The broader software industry has been quite inefficient, both in products and services. These inefficiencies have accumulated over decades of a prolonged asset bubble. Sadly, we adapted to a lot of those inefficiencies in India,” he expressed. 

Vembu also slammed the IT industry for roping in talents who could have otherwise contributed more meaningfully to industries such as manufacturing or infrastructure. 

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He further observed that India is at an “inflection point” and called for the need to start over again with a fresh perspective: “We are only in the early stages of a long reckoning. My thesis is that the last 30 years are not a good guidepost to the next 30 years. We are truly at an inflection point. We have to challenge our assumptions and do fresh thinking.”

Infosys Q4 report and subsequent layoffs

Infosys is planning a fresh round of layoffs, where it is expected to fire as many as 240 entry-level employees after they failed to pass an internal assessment, as reported by Moneycontrol. Earlier, in February, the IT giant let go of more than 300 trainees under similar circumstances and offered free upskilling programs through NIIT and UpGrad to those affected. 

These layoffs come hot on the heels of the company’s Q4 results announced on Thursday. The company reduced its revenue growth forecast for FY26 in constant currency terms to 0-3%, significantly lower than estimates ranging between 2-4% and the weakest since April 2009. Previously, in the December quarter, Infosys had predicted its revenue would grow by 4.5% to 5%. Its profit also dropped by 11.75% year-on-year. It also announced a final dividend of Rs 22 per equity share.

Wipro Q4 result

Wipro reported a 25.9% year-on-year jump in consolidated net profit to Rs 3,569.6 crore, while revenue rose 1.3% to Rs 22,504.2 crore. After adjusting for currency fluctuations, Wipro expects its Q1FY26 revenue to decline by 1.5 to 3.5% compared to the previous quarter. Owing to the disappointing Q4 report and weak Q1 guidance, Wipro shares have dipped 6%. The company did not declare any dividend in the March 2025 quarter.

TCS Q4 results

TCS has reported the slowest revenue growth in four years, at Rs 64,479 crore against Rs 61,237 crore posted in the same period last fiscal. The company reported Q4 profit at Rs 12,224 crore, down 1.69%in YoY. It continues to look strong despite the Q4 miss.