Last Updated:November 08, 2024, 18:14 IST

Expressing disapproval of companies with large cash reserves that still opt for layoffs, Vembu described such actions as “naked greed”.

In a pointed critique against companies favouring shareholders over employees, Zoho founder Sridhar Vembu has taken a strong stance against Freshworks’ recent decisions to lay off 660 employees while launching a $400 million stock buyback. Though he didn’t directly name Freshworks, Vembu’s posts on X (formerly Twitter) closely followed Freshworks’ financial actions, which resulted in a 28 per cent surge in its stock in the US market.

Expressing disapproval of companies with large cash reserves that still opt for layoffs, Vembu described such actions as “naked greed”. Freshworks, which holds around $1 billion in cash and reports a 20% growth rate, recently reduced its workforce by 12-13%.

Without taking Freshworks’ name, Vembu in a post on X said, “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.”

Vembu went on to question Freshworks’ leadership, challenging their willingness to invest in new opportunities that might have preserved jobs for affected employees rather than boosting 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, implying that Freshworks’ leaders may be “lacking in empathy.”

Vembu sees this as part of a concerning trend from the US, where he believes similar practices have led to employee cynicism. “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.”

Explaining Zoho’s philosophy, Vembu highlighted why Zoho remains a private company: “We put our customers and employees first. Shareholders should come last.”

Freshworks has not yet responded to Vembu’s remarks.

Last Updated:November 01, 2024, 17:07 IST

Dropbox has decided to lay off 528 employees or about 20 per cent of its workforce amid shoftening demand and macroeconomic headwinds in its core business.

Dropbox, a US-based file hosting services firm, has decided to lay off 528 employees or about 20 per cent of its workforce amid shoftening demand and macroeconomic headwinds in its core business, its CEO Drew Houston has said in a blogpost.

“I’m writing to let you all know that after careful consideration, we’ve decided to reduce our global workforce by approximately 20% or 528 Dropboxers,” said Houston in the blog.

This is the second round of layoffs at Dropbox after a 16 per cent reduction in staff in April 2023.

Full Text of Dropbox CEO Drew Houston’s Statement

“Hi everyone,

I’m writing to let you all know that after careful consideration, we’ve decided to reduce our global workforce by approximately 20% or 528 Dropboxers.

As CEO, I take full responsibility for this decision and the circumstances that led to it, and I’m truly sorry to those impacted by this change.

Why we’re making this decision

As we’ve shared over the last year, we’re in a transitional period as a company. Our FSS business has matured, and we’ve been working to build our next phase of growth with products like Dash. However, navigating this transition while maintaining our current structure and investment levels is no longer sustainable.

We continue to see softening demand and macro headwinds in our core business. But external factors are only part of the story. We’ve heard from many of you that our organizational structure has become overly complex, with excess layers of management slowing us down.

And while I’m proud of the progress we’ve made in the last couple years, in some parts of the business, we’re still not delivering at the level our customers deserve or performing in line with industry peers. So we’re making more significant cuts in areas where we’re over-invested or underperforming while designing a flatter, more efficient team structure overall.

The opportunity ahead

The changes we’re making today, while difficult, come at a pivotal moment when the market is accelerating precisely where we’ve placed our biggest bets. It’s been tremendously rewarding over the last few weeks to see customers and prospects light up when using Dash for Business for the first time, much like people did when we first launched Dropbox.

And this time we’re starting from a position of strength. Millions of customers trust us as the home for their most important files, making the leap to organizing all their cloud content a natural evolution.

But we’re not operating on our own schedule. This market is moving fast and investors are pouring hundreds of millions of dollars into this space. This both validates the opportunity we’ve been pursuing and underscores the need for even more urgency, even more aggressive investment, and decisive action.

The steps we’re taking today are necessary to both strengthen our core product and accelerate the growth of our new products. We’ll share more about our 2025 strategy in the days ahead.

Taking care of impacted employees

To those leaving Dropbox, we’re committed to supporting you through this transition. You’ll be eligible to receive the following benefits and support:

Severance, equity, and transition payment

All impacted employees will be eligible for sixteen weeks of pay, starting today, with one additional week of pay for each completed year of tenure at Dropbox. Internationally, severance packages will vary depending on regional practices and statutory requirements.

All impacted employees will receive their Q4 equity vest.

Those on the Corporate Bonus plan will be eligible to receive a pro-rated lump sum transition payment equivalent to their 2024 bonus target based on company performance forecasts and aligned with their level.

We will pay out eligible remaining current and approved upcoming paid leaves, including medical or family leaves.

We will support impacted visa holders by providing additional time to transition and access to 1:1 immigration consultation.

Healthcare and benefits

US employees will be eligible for up to six months of COBRA.

Canada-based employees will be eligible for a one-month healthcare extension.

All employees will continue to have access to Modern Health to support their mental well-being.

Devices

Impacted employees will be eligible to keep company devices (phones, tablets, laptops, and peripherals) for personal use.

Job placement

Job placement services and career coaching will be available at no cost.

Next steps

We’ll be sharing more details on high-level changes later today and will host company-wide Town Halls later this week to answer questions and discuss our plans in more detail.

I know this is incredibly difficult and unwelcome news. To everyone leaving Dropbox, I’m deeply grateful for everything you’ve done for our company and our customers.

Drew.”