Zoho CEO Sridhar Vembu announces no salary hikes as AI costs surge

Zoho's founder Sridhar Vembu announced via X that the company will forgo its customary annual salary increases because of heightened expenses tied to artificial intelligence and an uncertain market environment. He noted that server costs for data centers have risen fourfold and that AI usage has markedly inflated operating budgets. In response, Zoho has reduced its marketing spend and paused headcount growth, with no new hires for the past 18 months.

Vembu emphasized the company's commitment to preventing mass layoffs despite a grim outlook for software jobs. He also apologized to staff and acknowledged their support during this challenging period, asking for continued patience as the firm navigates its reinvention over the next few years.