Zoho pauses pay hikes as AI costs jump
By Abha Lohia ·
Zoho: funding and every story →
- Zoho is a Chennai-based software company founded by Sridhar Vembu, known for running a large suite of business products
- Vembu said server prices have risen four-fold because of AI, so the firm paused yearly raises and trimmed its marketing budget
- He also froze hiring growth, said Zoho will work to avoid mass layoffs, and called the outlook for software jobs grim
What happened
- Zoho will give no annual pay rise this year.
- Marketing spend is cut.
- Headcount growth is frozen.
- The founder apologised to staff in a post on X.
Why it matters
- AI-driven demand has made server prices four times higher.
- The outlook for software is uncertain.
- Geopolitical challenges add pressure.
The business
- Zoho sells a broad range of business software.
- It is led by founder Sridhar Vembu.
The founders
In numbers
4xServer price rise · 2026
What happens next
- Work to avoid mass layoffs.
Other articles talking about it
CNBC-TV18 ↗Business Standard ↗Business Standard ↗Moneycontrol ↗Moneycontrol ↗The Hindu BusinessLine ↗
Terms in this story
- Layoffs: Startups lay people off when cash runs short or growth plans change, and the main reasons are over-hiring, a funding slowdown and a business that does not earn enough. The law sets notice and pay rules that differ by role and by the size of the company.
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