In an apparent criticism of Freshworks, Zoho founder Sridhar Vembu said a company that had over a billion dollars in the bank and yet chose to prioritise shareholders by undertaking layoffs and announcing a buyback, should not expect its workforce to remain loyal.
"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 percent rate and making a cash profit, laying off 12-13 percent 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 wrote on X on November 8.
"I can understand the unfortunate reality of layoffs when a business is struggling or declining and making a loss. This is not that situation, this is naked greed, nothing less," he added.
While he did not name Freshworks in his X post, the implication was clear, considering his strident criticism came just a day after Freshworks earnings and shock layoffs of 660 people, even as it announced a $400-million buyback, moves that sent its shares soaring 28 percent in the US markets on Thursday.
Vembu also indirectly asked a few questions to the Nasdaq listed major. "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 you don't want anymore? Are there no such opportunities in tech? Are you so lacking in curiosity, vision and imagination? Are you so lacking in empathy?"
Zoho's founder added that this is the reason why the company chose to remain private. "We put our customers and employees first. Shareholders should come last," he added.
Dennis Woodside, CEO of Nasdaq-listed Freshworks, announced on November 7 that the company will be trim down its workforce by 13 percent, which will see around 660 employees being laid off. The move is part of the SaaS firm's strategic priorities focused on improving efficiencies and reducing complexities across teams.
The firm has more than 5,000 employees on rolls and has conducted multiple rounds of layoffs and management rejig since 2024.
In May, in a major management realignment, Girish Mathrubootham, who was the chief executive officer (CEO) of Nasdaq-listed Freshworks, became the executive chairman of the company while Dennis Woodside has been named his replacement.
Zoho and Freshworks have a chequered and uneasy history. Freshworks founder Girish Mathrubootham previously worked at Zoho before starting up in 2010.The companies have been in battle since March 2020, after Zoho filed a lawsuit alleging that Freshworks stole its confidential information.
The two settled the case in 2021 when Freshworks admitted that a former employee of the company wrongfully accessed and used Zoho confidential information relating to sales leads.
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