Last update:08 November 2024, 18:14 IST

Expressing his disapproval of cash-strapped companies still opting for layoffs, Vembu described such actions as “greed in disguise.”

Sridhar Vembu said a company that has about $1 billion in cash and is reporting a 20 percent growth rate has recently cut its workforce by 12-13 percent.

In a scathing criticism of companies that favor shareholders over employees, Zoho founder Sridhar Vembu has taken a strong stand against Freshworks’ recent decisions to lay off 660 employees as it launches a $400 million share buyback . Although he did not name Freshworks directly, Vembu’s posts on X (formerly Twitter) closely followed Freshworks’ financial actions, which led to a 28% rise in its stock in the US market.

Expressing his disapproval of cash-rich companies still opting for layoffs, Vembu described such actions as “empty greed.” Freshworks, which has about $1 billion in cash and reports a 20% growth rate, recently cut its workforce by 12-13%.

Without naming Freshworks, Vembu in a post on X said: “A company that has $1 billion in cash, which is about 1.5 times its annual revenue, and is actually still growing at decent 20% and makes a cash profit, 12-13% of the workforce should never expect any loyalty from its employees. And to add insult to injury, when he can afford $400 million in a share buyback.”

Vembu continued to question Freshworks’ management, challenging its willingness to invest in new opportunities that could have preserved jobs for affected employees rather than boost shareholder returns.

“Don’t you have the vision and imagination to invest $400 million in another line of business where you can deploy those people you hired but no longer want?” he asked he, implying that Freshworks leaders may “lack empathy. “

Vembu sees this as part of a worrying trend in the US, where he believes similar practices have led to employee cynicism. “This behavior has unfortunately become all too common in the US corporate world and we are importing it to India. It has only resulted in widespread employee cynicism in the U.S., 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 is yet to respond to Vembu’s remarks.