Sridhar Vembu, Founder & CEO of Zoho, has swiped at Freshworks over its latest round of layoffs.
Last week, Zoho’s CRM market rival cut 660 roles, trimming its workforce by 13 percent.
Freshworks shared the announcement during an earnings call with investors. There, it also revealed “strong” revenue growth of 22 percent year-over-year (YoY).
Nevertheless, Dennis Woodside, CEO of Freshworks, justified the cuts as an attempt to “streamline” the company and fixate on its employee experience, AI, and customer experience businesses.
Woodside described these areas as the company’s three strategic imperatives.
Additionally, he promised affected employees multiple forms of relief, including severance pay based on tenure, extended healthcare coverage, and even immigration support where needed.
However, Vembu dealt a thinly-veiled blow to Freshworks.
“This is naked greed, nothing less,” he said in a post on X.
He also questioned the long-term impact of the move, noting: “[Freshworks] should not expect any loyalty from its employees ever.”
From there, the CEO accuses Freshworks of lacking empathy, vision, and imagination in not finding an alternative solution.
Closing up, he claimed that, as a private company, Zoho puts its customers and employees first, not the shareholders, who – in his opinion – should come last. The full post is available below.
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,…
— Sridhar Vembu (@svembu) November 7, 2024
Yet, Vembu didn’t stop there. Instead, he jumped into the comments section to fire back at observers who defended the move as a natural part of business.
“Letting poor performers go is not the same as “we make a decent profit, we are growing, we want even more profit and we want a higher stock price so we will lay off people”,” he said.
CX Today has approached a PR team working on behalf of Freshworks for a response to Vembu’s comments but hasn’t yet received a reply.
That PR team is hard at work promoting Freshworks’ new autonomous AI Agent: Freddy.
Freshworks is following Salesforce – another CRM competitor – in releasing Freddy, as the market leader made a splash with Agentforce, its autonomous AI platform.
Now, Salesforce has pledged to hire 1,000+ employees to capitalize on its “amazing momentum”.
Meanwhile, Zoho is yet to make a similar agentic AI announcement. However, it has strengthened its partnership with NVIDIA and set the scenes for a significant generative AI (GenAI) play.
By doing so, it may ratchet up its rivalry with Freshworks, a business founded – like Zoho – in Chennai, India.
Yet, Zoho’s outspoken CEO is already fanning the flames, something he’s not afraid to do. Just last week, he celebrated the US election victory of Donald Trump and the “defeat of the globalist left”.
Under the cover of the US elections, Freshworks perhaps hoped its layoffs would garner less attention, yet Vembu has pushed them back up the CX agenda.
Elsewhere, Avaya also chose the day after the US election to announce its next round of layoffs.
