In a scathing critique aimed at companies prioritizing shareholders over employees, Zoho founder Sridhar Vembu condemned Freshworks for its recent workforce cuts and stock buyback plan. Though he did not explicitly name Freshworks, his remarks on X (formerly Twitter) closely followed Freshworks’ latest financial moves—layoffs of 660 employees and a $400 million stock buyback, which sent its shares soaring 28% in the US market.
Vembu voiced disapproval of companies maintaining high cash reserves yet opting for layoffs, a move he called “naked greed.” Freshworks, boasting $1 billion in cash and a 20% growth rate, recently laid off 12-13% of its workforce. Vembu’s response was unequivocal:
“A company that has $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 buyback.”
He challenged Freshworks’ leadership, questioning their willingness to invest in new avenues that could sustain displaced workers rather than prioritize 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 don’t want anymore?” he asked, hinting that Freshworks’ leadership might be “lacking in empathy.”
Vembu’s frustration highlighted a trend he sees infiltrating India’s corporate culture from the US, where he believes similar practices have eroded employee morale. “This behavior, sadly, has become all too common in the US corporate world, and we are importing it in India. It has only resulted in large-scale employee cynicism in the US, and we are importing that too.”
Emphasizing Zoho’s commitment to employees over shareholders, Vembu explained why Zoho remains private. “We put our customers and employees first. Shareholders should come last,” he concluded.
Freshworks is yet to respond to Vembu’s comments.