Zoho founder calls SaaS layoffs normal but refuses to cut jobs
Zoho's founder says tech layoffs are a choice, contrasting his retraining strategy with Airtable's recent decision to cut staff.
Layoffs · Source: Pune Media
What happened
Zoho founder Sridhar Vembu recently responded to a major layoff announcement from software rival Airtable. Federico Simionato is an executive at Bending Spoons, the company that now owns Airtable. Simionato stated that the company decided to let go of a large part of its workforce. He explained this decision was not a reflection of poor employee performance. Instead, he said the company simply believes that smaller teams ship more features and build better products. The goal is to create a leaner structure focused on customer requests and new infrastructure investments.
Vembu publicly quoted the layoff message and called this approach normal in the software-as-a-service industry. However, he made it very clear that Zoho refuses to follow this same path. He highlighted a stark difference between Zoho's workforce strategy and the methods used by venture capital-backed tech companies. Publicly listed companies often face immense pressure to cut costs quickly. Zoho has intentionally avoided taking that route.
Instead of cutting jobs when artificial intelligence improves productivity, Zoho chooses to retrain its workers. Vembu explained that when AI allows smaller teams to do the same work, extra employees are moved to new products. They are also redeployed to help customers better. Vembu did acknowledge that rising data center and AI infrastructure costs put heavy financial pressure on the business. Despite these rising costs, Zoho remains committed to protecting its workforce and evaluating the results in the year 2030.
By the numbers
- Airtable — The SaaS competitor that recently laid off a large part of its team to focus on smaller teams.
- Bending Spoons — The company that owns Airtable and executed the recent workforce reductions.
- 2030 — The year Vembu suggested will prove which workforce strategy is ultimately successful.
Why it matters
This situation highlights two completely opposite philosophies operating in the current tech job market. One approach uses artificial intelligence and efficiency goals to justify shrinking the workforce. This helps companies save money and satisfy investors in the short term. The other approach views artificial intelligence as a tool to free up human workers. Those workers can then tackle new projects, build new products, and improve customer service. Both companies are operating in the same industry, but they are making very different choices about human capital.
For job seekers, this reveals that layoffs are not always an unavoidable result of technological advancements. They are a strategic choice made by company leadership. Companies backed by venture capital often prioritize lean operations to manage their operating costs. On the other hand, privately held or bootstrapped companies might have the freedom to invest in long-term employee development. Understanding this dynamic helps you see the hidden risks in the job market. The funding model of your employer directly impacts your job security.
Who this hits
Tech workers at VC-funded companies
You remain highly vulnerable to sudden restructuring and workforce reductions. Leadership at these companies often views smaller teams as the best way to manage rising infrastructure costs and satisfy investors.
Job seekers evaluating offers
The financial structure and funding model of your potential employer matter more than ever before. Privately held companies with a history of retraining staff may offer much better job security during industry shifts.
Employees working with AI tools
Your daily workflows will change as artificial intelligence improves productivity. The key difference is whether your employer uses those gains to eliminate your role or to transition you into a new project.
What to do this week
- Research how a target company handled the recent wave of artificial intelligence advancements before you apply.
- Ask hiring managers directly about their philosophy on team size and productivity during your job interviews.
- Look for clear evidence of internal retraining programs or internal mobility before accepting a job offer.
- Prioritize applying to bootstrapped or privately held companies if long-term job security is your primary career goal right now.
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My take
I see two clear paths emerging in the tech industry right now. Companies will either use artificial intelligence to cut your job, or they will use it to free you up for new work. Layoffs might be normal, but they are absolutely a choice. Finding an employer who chooses the second path is the best way to protect your career.