Sridhar Vembu, the founder of Zoho, has expressed his disapproval regarding the recent layoffs at competitor Freshworks, raising concerns about employee welfare. Vembu questioned whether prioritising employees over shareholders makes him a socialist.

What Happened: Vembu criticised Freshworks for focusing on shareholder interests despite having over a billion dollars in reserves, suggesting that such actions could harm employee loyalty.

The following day, he cited companies like Nvidia and AMD as examples of success through long-term employee retention and praised Taiwan’s approach to nurturing deep tech companies by valuing talent.

"Am I a socialist to focus on the most important asset of any company – their own people and their well being?"

Vembu also criticised Intel for prioritising Wall Street, leading to losses to competitors such as TSMC, AMD, and Nvidia. He argued that the current financial system in the U.S. distorts capitalism.

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Dennis Woodside, CEO of Freshworks, announced on November 7 that the company would reduce its workforce by 13%, affecting around 660 employees, as part of a strategy to enhance efficiency.

Vembu further commented on the collapse of Silicon Valley Bank, questioning the U.S. financial system and urging India not to adopt similar practices. Zoho and Freshworks have a contentious history, with legal disputes over confidential information.

Why It Matters: Vembu’s criticism of Freshworks comes amid his growing influence as a respected figure in the Indian startup ecosystem.

In a recent Reddit poll, he was celebrated as the “best founder” for his community-focused approach and successful business model, contrasting with other founders facing allegations of toxic work environments.

Additionally, Vembu’s vision for India’s economic future aligns with [Ray Dalio’s bullish outlook, predicting robust growth driven by a blend of potential and leadership.

Zoho’s recent venture into chipmaking with a $700 million investment plan further underscores Vembu’s commitment to innovation and long-term strategy, setting a precedent for valuing talent and sustainable growth.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo courtesy: Zoho