Sridhar Vembu, the founder of Zoho Corporation, is in the spotlight after announcing a freeze on salary increments and cuts to the company’s marketing budget amid rising AI-related costs.
The October 13 announcement has sparked debate over how artificial intelligence is changing the software industry and the way companies operate.
Founded in 1996 as AdventNet Inc., Zoho grew from a bootstrapped venture into a global software company offering a range of business and productivity tools. Now, as the company faces rising data centre and server expenses amid the growing adoption of AI, Vembu has indicated that cost-cutting measures are necessary to protect the business and avoid large-scale layoffs.
While the company is reinventing itself with more advanced AI tools to remain feasible, the recent announcement has drawn mixed reactions online. At a time when Indians are returning to build businesses following US Green Card rules, Vembu’s decision does not sit well.
Who Is Sridhar Vembu?
Sridhar Vembu was born in 1968 in a village in Thanjavur district, Tamil Nadu. Academically sound, Vembu earned his bachelor’s degree in electrical engineering from the Indian Institute of Technology. For higher education, he moved to the United States. At Princeton University in New Jersey, he completed his master’s and PhD in Electrical Engineering.
Following his education, he took up a teaching job in Australia. However, he quit within two weeks and joined Qualcomm in San Diego, California, in 1994, and later in the San Francisco Bay Area.
How Was Zoho Started?
Vembu founded Zoho in 1996 as AdventNet Inc. with his siblings. Started as a bootstrapped company in Chennai, the founders focused on building network management software for telecom companies. After surviving the 2001 dot-com crash, Vembu ventured into cloud-based applications like Zoho CRM.
In 2005, the Zoho brand was launched. With the success of these productivity tools, the company soared to great heights and was renamed Zoho Corporation in 2009. Currently, Vembu is the Chief Scientist at Zoho Corporation after stepping down as Group CEO in 2025. Now he administers the research team, deep-search infrastructure, and AI strategies.
Latest Update On Zoho
Zoho is dominating the news after Sridhar announced that the company will skip annual increments and freeze salary hikes this year. Explaining his decision, Sridhar said that due to the rise in AI adoption, the data centre and server expenses have increased drastically, thereby decreasing the company’s customer acquisition.
Further, he added that to avoid massive layoffs, the marketing budget has also been restricted to an 18-month hiring freeze. He also shared his concern that moving forward, finding software opportunities will be bleak. With the advent of AI tools, companies are now building their own custom software without needing external resources.