Zoho CEO Slams Freshworks Layoffs Announcement Despite $400 Million Share Buy Back

Zoho CEO Sridhar Vembu recently took to social media platform X (formerly Twitter) to criticise the IT company Freshworks for its layoffs.

Earlier this week, Nasdaq-listed Freshworks announced that it would lay off around 12% to 13 % of its global workforce and this will impact approximately 660 employees.

This update has come in at a time when the company has decided to buy back $400 million shares from the open market.

The company has also reduced its consolidated net loss by 3.5% year-on-year (y-o-y) to $29.95 million in Q3 FY24 from $31.03 million in the previous fiscal.

What Was The 'Insult To Injury'?

Vembu in his post on X said that a company with “$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 buy back.”

He added that he understands layoffs in case of a business that is struggling or declining and said that this situation was not the same as it was "naked greed".

Questions For Freshworks Leadership

Sridhar Vembu in the same post goes on to ask critical questions like whether or not the higher management and leadership of Freshworks has the vision to invest $400 million in another line of business where it can choose to deploy those 660 people that will be affected.

He also emphasises on their lack of empathy, curiosity, vision and imagination.

He further highlights that this is a phenomenon that has become too common in the US corporate world and is being implemented in India as well, leading to large scale employee cynicism.

He concludes his post saying, "We put our customers and employees first. Shareholders should come last."