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Expressing disapproval of corporations with big cash reserves that additionally go for layoffs, Vembu described such actions as “naked greed”.
Sridhar Vembu talked about a company that holds spherical $1 billion in cash and research a 20% growth price, simply these days lowered its workforce by 12-13%.
In a pointed critique in the direction of corporations favouring shareholders over workers, Zoho founder Sridhar Vembu has taken a strong stance in the direction of Freshworks’ newest decisions to place off 660 workers whereas launching a $400 million stock buyback. Though he didn’t immediately title Freshworks, Vembu’s posts on X (beforehand Twitter) rigorously adopted Freshworks’ financial actions, which resulted in a 28 per cent surge in its stock inside the US market.
Expressing disapproval of corporations with big cash reserves that additionally go for layoffs, Vembu described such actions as “bare greed”. Freshworks, which holds round $1 billion in money and studies a 20% progress price, not too long ago diminished its workforce by 12-13%.
Without taking Freshworks’ identify, Vembu in a put up on X stated, “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.”
An group that has $1 billion cash, which is about 1.5 cases its annual earnings, and is unquestionably nonetheless rising at a very good 20% price and making a cash income, shedding 12-13% of its workforce mustn’t rely on any loyalty from its workers ever. And in order so as to add insult to hurt,…— Sridhar Vembu (@svembu) November 7, 2024
Vembu went on to question Freshworks’ administration, troublesome their willingness to spend cash on new alternate options which can have preserved jobs for affected workers comparatively than boosting shareholder returns.
“Don’t you may have the imaginative and prescient and creativeness to speculate $400 million in one other line of enterprise the place you’ll be able to deploy these individuals you employed however don’t need anymore?” he requested, implying that Freshworks’ leaders could also be “lacking in empathy.”
Vembu sees this as part of a concerning sample from the US, the place he believes associated practices have led to employee cynicism. “This conduct, sadly, has develop into all too widespread within the US company world, and we’re importing it in India. It has solely resulted in large-scale worker cynicism within the US, and we’re importing that too.”
Explaining Zoho’s philosophy, Vembu highlighted why Zoho stays a non-public firm: “We put our customers and employees first. Shareholders should come last.”
Freshworks has not however responded to Vembu’s remarks.
News enterprise Can Afford $400-Million Buyback But Still 12% Layoff: Zoho’s Sridhar Vembu Calls Out Firm for ‘Naked Greed’
