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Expressing disapproval of companies with big cash reserves that additionally go for layoffs, Vembu described such actions as “naked greed”.
Sridhar Vembu talked about a corporation that holds spherical $1 billion in cash and research a 20% improvement payment, simply recently lowered its workforce by 12-13%.
In a pointed critique in the direction of companies favouring shareholders over employees, Zoho founder Sridhar Vembu has taken a strong stance in the direction of Freshworks’ newest selections to place off 660 employees whereas launching a $400 million stock buyback. Though he didn’t immediately title Freshworks, Vembu’s posts on X (beforehand Twitter) fastidiously adopted Freshworks’ financial actions, which resulted in a 28 per cent surge in its stock inside the US market.
Expressing disapproval of companies 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% development price, just lately decreased its workforce by 12-13%.
Without taking Freshworks’ title, Vembu in a publish 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 situations its annual earnings, and is unquestionably nonetheless rising at a very good 20% payment and making a cash income, shedding 12-13% of its workforce mustn’t rely on any loyalty from its employees ever. And in order so as to add insult to hurt,…— Sridhar Vembu (@svembu) November 7, 2024
Vembu went on to question Freshworks’ administration, tough their willingness to spend cash on new alternate options which can have preserved jobs for affected employees 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 relating to 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 personal 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’
