‘We retrain people’: Zoho’s Sridhar Vembu reacts to AI layoffs

Days after citing rising AI and server costs to explain why Zoho would not give its usual annual salary increases this year, founder Sridhar Vembu has weighed in on Airtable’s layoffs. He said Zoho takes a different approach when AI allows smaller teams to do more, retraining employees for new products and customer support.

“This is normal in SaaS. This is what we have refused to do,” Vembu wrote on X on Thursday, responding to a post by Airtable executive Federico Simionato announcing that the company was laying off a large part of its workforce.

“When AI productivity enables smaller teams, we retrain people to deploy on new products or helping customers better,” Vembu added.

He said Zoho’s business was growing but the company faced considerable pressure from data-centre and AI costs.

“We have chosen a different approach than VC-funded and public companies. We will see in 2030,” Vembu wrote.

Why Airtable is cutting jobs

Simionato announced the layoffs, saying the decision reflected Airtable’s belief that smaller teams could deliver more and better work.

“This is not a reflection of their work but a reflection of our deep belief that small teams ship more and better,” he wrote.

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Airtable plans to set up a core team to deliver features requested by users every month. Simionato said the team had already shipped more than 30 improvements in three weeks.

The company also plans upgrades to Omni, Airtable Canvas and its Model Context Protocol (MCP) capabilities, along with support for bring-your-own agents. Separate performance and infrastructure teams will focus on speeding up databases and increasing limits on records, fields and synchronisation.

Zoho faces rising AI and server costs

Vembu’s response comes two days after he said Zoho would not offer its usual annual salary increases this year. He cited rising AI expenses, a fourfold increase in server prices and an uncertain outlook for the software industry.

“The business outlook for software is uncertain and AI has raised costs dramatically,” he wrote on October 13.

Vembu said Zoho had reduced its marketing budget to control spending. He also said the company had not increased its employee count for 18 months and would work to avoid mass layoffs, warning that the outlook for software jobs was grim.

“I have apologised for not being able to avoid this,” he said, referring to the decision to hold back the usual salary increases.

The decision came as AI tools became more widely used in software development and other business tasks. While these tools can help teams work faster, running them also requires computing power, servers and data centres, adding to operating costs.

AI changes the software jobs outlook

Vembu has previously warned that AI could put many intellectual jobs at risk, including software development. His latest remarks highlight one question facing the software industry: what companies do with employees when AI allows smaller teams to handle more work.

Vembu said the next few years would be important for Zoho as it adapts to these changes. His reference to 2030 suggests that he sees the long-term results of the company’s approach as a test of whether it can manage rising costs while continuing to grow.