Zoho founder and chief scientist Sridhar Vembu said the company would stop annual pay raises for staff and trim its marketing spend after a sharp rise in AI‑related operating costs.
Vembu posted the decision on X, noting that AI usage has driven up expenses significantly in the past month. He added that the move aims to preserve cash flow while maintaining the company’s competitive edge.
The announcement comes amid a broader inflationary trend that has pushed technology firms to rethink cost structures, and a geopolitical environment that has disrupted supply chains and market confidence. Analysts say the combination of these factors has forced many tech companies to tighten budgets.
Vembu warned that the company intends to avoid mass layoffs and will keep a close eye on cost trends, with any future adjustments subject to market conditions. The next step will be a quarterly review of expenses and workforce needs.