Zoho will not give its usual annual salary increases in 2026, co-founder Sridhar Vembu said in a post on X on October 12. The company is also cutting marketing spend.
Vembu blamed rising costs and an uncertain market. “The business outlook for software is uncertain and AI has raised costs dramatically,” he wrote. He pointed to a “massive 4-fold increase in server prices which we need for data centers” and to “AI usage increasing rapidly, leading to much higher expenses, which we are trying to control.”
Zoho’s headcount has been flat for 18 months. Vembu said the company will work to avoid mass layoffs. He called the outlook for software jobs grim and said the next three to five years will decide how Zoho’s business reinvention turns out.
Zoho has not disclosed its total AI spend or how much the pay freeze and marketing cuts will save.
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