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Zoho has reportedly cancelled its usual appraisal review and pay increase for the year. Co-founder Sridhar Vembu said the company would work to avoid mass layoffs, while warning that the outlook for software jobs is grim. The decision affects compensation; it does not establish that Zoho has begun layoffs or guarantee that none will happen.
What Zoho changed for employees
In reports published October 13, 2026, India Today and Mint said Zoho would not provide its usual annual pay increase. India Today described the move as cancelling appraisals for the year. The available accounts frame this as a change to the company’s regular review and compensation process, not as evidence that employees had already been laid off. India Today and Mint reported the decision.
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For employees, the direct near-term implication is that they should not count on the usual annual raise or appraisal review this year. The reports do not specify whether Zoho will make exceptions, change other compensation components, or later restore the review cycle.
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Vembu attributed the decision to an uncertain outlook for the software business, higher costs from growing AI use, rising data-center server prices, and a challenging geopolitical environment. He also said Zoho had cut its marketing budget. These are his reported explanations; the October reports do not independently verify the company’s costs or provide a baseline and market scope for his statement that server prices had risen fourfold.
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He said Zoho was in the middle of reinventing itself and that the next three to five years would determine how that reinvention worked. That is a forecast about the company’s transition, not a promise of a particular business or employment outcome.
Are layoffs coming at Zoho?
Vembu said, “We will work hard to avoid mass layoffs but the outlook for software jobs in general is grim,” according to India Today’s October 13 report. The wording indicates an effort to avoid large-scale job cuts, not a guarantee that layoffs are impossible. Neither the appraisal decision nor the statement alone confirms that layoffs have occurred.
Vembu also said, “We have not been growing our employee count for 18 months now.” That is his account of Zoho’s headcount trend; the reports do not provide an independent employee-count series. A company not adding staff is different from a company reducing its workforce.
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How Vembu connects Zoho’s decision to India’s jobs outlook
In comments reported on August 2, 2026, Vembu widened the issue beyond Zoho. He argued that India faces a major challenge creating work for its young population and said the IT industry, including Zoho, had not created many jobs in recent years. He also said money that might otherwise go to new employees was being spent on AI and data-center costs. Business Today and Business Standard reported those remarks.
Vembu questioned whether a global software market he described as saturated needs much more software when AI can make development faster. His concern is that higher productivity could coexist with weaker demand for new software workers. That is an argument about the direction of the industry, not a verified forecast of how many jobs will be created or lost.
He also asked which other sectors could absorb workers if technology hiring slowed, arguing that automation limits employment in large-scale manufacturing. This is his view of the employment challenge; it does not establish that manufacturing or other industries cannot create jobs.
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What employees and job seekers can reasonably take from this
- For Zoho employees: The reports indicate no usual appraisal review or pay increase for the year. They do not spell out how individual compensation decisions or other benefits will be handled.
- For people considering software careers: Vembu’s warning is a signal of uncertainty, not proof that software jobs will disappear. His comments describe concerns about hiring and costs, but do not quantify the outlook across India’s labor market.
- For anyone assessing layoff risk: “Work hard to avoid” is not the same as ruling out layoffs. The reports provide no confirmed layoff count.
The phrase “a million things to build” in the headline framing is not verified in the cited coverage. The August reports support a broader point: Vembu argued that India needs jobs for its young people and questioned where work will come from if IT hiring slows.
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