Zoho pay freeze: Sridhar Vembu says AI has raised costs dramatically, there is no pay increase this year, headcount has been flat for 18 months and 'the outlook for software jobs in general is grim'

Zoho founder Sridhar Vembu says AI has raised costs dramatically: no pay increase this year, flat headcount for 18 months and a "grim" outlook for software jobs. Writing on X on 13 October 2026, Vembu, who runs the privately held Indian software maker behind Zoho's business apps, said "the business outlook for software is uncertain and AI has raised costs dramatically", pointing to a "massive 4-fold increase in server prices which we need for data centers" and to AI usage "increasing rapidly, leading to much higher expenses, which we are trying to control". The company has cut its marketing budget and told employees "we cannot have our usual pay increase this year", for which he said he had apologised. On jobs he wrote: "We will work hard to avoid mass layoffs but the outlook for software jobs in general is grim. We have not been growing our employee count for 18 months now." He described Zoho as "in the middle of reinventing ourselves" and said the next three to five years will decide whether that works. This is a statement from an employer about costs and hiring, not a job cut, so it does not touch the AI layoffs tracker. It matters because it is the clearest account yet from a large Indian software employer of how AI spending is squeezing payroll: money going to servers and model usage rather than to pay rises or new hires, with the founder himself calling the wider outlook for software jobs grim.