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Expressing disapproval of firms with giant money reserves that also go for layoffs, Vembu described such actions as “naked greed”.
Sridhar Vembu mentioned an organization that holds round $1 billion in money and studies a 20% development fee, just lately lowered its workforce by 12-13%.
In a pointed critique towards firms favouring shareholders over staff, Zoho founder Sridhar Vembu has taken a robust stance towards Freshworks’ latest choices to put off 660 staff whereas launching a $400 million inventory buyback. Though he didn’t instantly title Freshworks, Vembu’s posts on X (previously Twitter) carefully adopted Freshworks’ monetary actions, which resulted in a 28 per cent surge in its inventory within the US market.
Expressing disapproval of firms with giant money reserves that also go for layoffs, Vembu described such actions as “bare greed”. Freshworks, which holds around $1 billion in cash and reports a 20% growth rate, recently reduced its workforce by 12-13%.
Without taking Freshworks’ name, Vembu in a post on X said, “A company that has $1 billion cash, which is about 1.5 times its annual revenue, and is actually still growing at a decent 20% rate and making a cash profit, laying off 12-13% of its workforce should not expect any loyalty from its employees ever. And to add insult to injury, when it can afford $400 million in a stock buyback.”
An organization that has $1 billion money, which is about 1.5 instances its annual income, and is definitely nonetheless rising at a good 20% fee and making a money revenue, shedding 12-13% of its workforce mustn’t count on any loyalty from its staff ever. And so as to add insult to harm,…— Sridhar Vembu (@svembu) November 7, 2024
Vembu went on to query Freshworks’ management, difficult their willingness to spend money on new alternatives which may have preserved jobs for affected staff relatively than boosting shareholder returns.
“Don’t you may have the imaginative and prescient and creativeness to speculate $400 million in one other line of enterprise the place you’ll be able to deploy these individuals you employed however don’t need anymore?” he asked, implying that Freshworks’ leaders may be “lacking in empathy.”
Vembu sees this as a part of a regarding pattern from the US, the place he believes related practices have led to worker cynicism. “This conduct, sadly, has develop into all too widespread within the US company world, and we’re importing it in India. It has solely resulted in large-scale worker cynicism within the US, and we’re importing that too.”
Explaining Zoho’s philosophy, Vembu highlighted why Zoho remains a private company: “We put our customers and employees first. Shareholders should come last.”
Freshworks has not but responded to Vembu’s remarks.
