While tech giants and start-ups around the world are laying off employees to please Wall Street and focus on profitability, Indian billionaire Sridhar Vembu believes that several companies are implementing layoffs due to ‘naked greed’.

Vembu says these companies should not expect loyalty from their employees; He made this statement as an open mockery of his company, Zoho’s rival Freshworks.

“A company that has $1 billion in cash, which is about 1.5 times its annual revenue, and is actually still growing at a reasonable rate of 20 percent and generating cash profits, while laying off 12-13 percent of its workforce, should not expect loyalty from itself. employees at all. Vembu added insult to injury when, without naming any companies, in a post on microblogging platform X it could afford $400 million in stock buybacks.

“I can understand the unfortunate reality of layoffs when a business is struggling or declining and making a loss. “This is not such a situation, this is clear greed, nothing less,” he added.

A company that has $1 billion in cash, which is about 1.5 times its annual revenue, and is actually still growing at a reasonable rate of 20 percent and generating cash profits, while laying off 12-13 percent of its workforce, shouldn’t expect any loyalty from its employees. employees at all. And to add insult to injury,…

— Sridhar Vembu (@svembu) November 7, 2024

The Zoho founder’s remarks came a day after Freshworks announced its results for the July-September 2024 quarter; Its total revenue was $186.6 million, an increase of 22% compared to total revenue of $153.6 million in the same quarter of 2023, with a 22% adjustment. For stable currency. The firm also increased its full-year 2024 revenue, non-GAAP operating income and non-GAAP net income per share guidance.

However, the Nasdaq-listed software as a service (SaaS) giant announced that it will reduce its workforce by 13%, affecting approximately 660 employees worldwide, as part of its efforts to streamline operations. The company currently has more than 5,000 employees. The layoffs will affect Freshworks staff in the US, India and other regions.

Freshworks also announced that its board of directors approved a $400 million share repurchase program, but did not provide a detailed timeline for that implementation.

Following these developments, without naming Freshworks (although the details of the post appear to match those in Freshworks results), Chennai-based Vembu posed a critical question to the firm’s leadership.

“Don’t you have the vision and imagination to invest $400 million in another business line where you can assign people you hired but no longer want? Are there no such opportunities in technology? Are you that lacking in curiosity, vision and imagination? Do you lack the ability to empathize that much? he wrote

Zoho’s founder claimed that this behavior has unfortunately become very common in the US corporate world and has been imported into India as well. This has resulted in large-scale employee cynicism in the US alone, and is being imported here as well.

Vembu argued that this was why he decided to keep his company private. “We put our customers and employees first. Shareholders should come last.”

When an For a period of time, it will allow the company to redeploy a large number of people it has hired.

“Second, if you have a lot of money (this is the situation I’m talking about), using our imagination to launch new products and services can be a good way to put people to work. “Layoffs under the conditions I mentioned completely destroy morale,” he replied.

In a reply to another user, he said that this was not the norm at all in the US 50 years ago. US companies have become the best in the world by taking care of their employees. But he said the “shareholders first” world led by private equity and Wall Street isn’t working and won’t even end well for shareholders.

Vembu also emphasized that the Friedman Doctrine (the sole mission of a company is to maximize profits and shareholder value) does not work. A “use and throw away” model emerges for employees. “People don’t like to be treated this way.”

“So why did it work in the US? “Topsoil erosion and import of new topsoil” – use and discard your people and then import new people to replace them. “We have just seen the extreme political division that the model has created.”