Zoho Staff Miss This Year's Usual Pay Rise, and Headcount Has Been Flat for 18 Months

Zoho staff will get no usual pay increase this year from the company, and founder Sridhar Vembu tied the decision to a massive 4-fold increase in server prices that Zoho needs for its data centres plus AI usage increasing rapidly, leading to much higher expenses. Zoho has also cut down on its marketing budget, and the company will work hard to avoid mass layoffs even as Vembu called the outlook for software jobs in general grim. For Metaintro readers who work at Zoho, hope to join it, or work anywhere in India's software product sector, this guide covers what was actually decided, what was not, what memory market forecasts say about server memory prices, and how a skipped raise compares with pay trends across Indian tech.

What Exactly Did Sridhar Vembu Tell Zoho Employees?

Vembu made the decision public in a post on X dated October 12, 2026. It opens with the line that the business outlook for software is uncertain and AI has raised costs dramatically.

Vembu then listed the decisions. Zoho has cut down on its marketing budget, and staff cannot have the usual pay increase this year. Vembu added that he had apologised for not being able to avoid this.

Vembu also addressed jobs. Zoho will work hard to avoid mass layoffs, the company has not been growing its employee count for 18 months, and most of its employees understand the situation, in Vembu's words. He followed that line in the post by thanking them.

It closes on the long view. Zoho is in the middle of reinventing itself, and the next 3-5 years will decide how its reinvention has worked. The last line of the post reads Please pray for us.

Some details are missing. Vembu gave no figure for the number of employees impacted by the salary decision or the overall increase in Zoho's AI-related expenditure, and none of the coverage linked here describes a bonus, one-off payment or perk offered in place of the raise.

Why Does Zoho Say Its Costs Have Jumped?

Vembu listed two cost drivers. The first is a four-fold increase in server prices, and the servers in question are the ones Zoho needs for its data centers.

The second driver is AI usage. Usage is increasing rapidly, leading to much higher expenses, which we are trying to control, in Vembu's words. A third pressure sits on top of both, which the post calls the challenging geopolitical backdrop.

The four-fold figure is Vembu's own and refers to server prices which we need for data centers. Vembu named no breakdown by component, model or time period for the 4-fold figure.

What Is Happening to Server Memory Prices Across the Industry?

DRAM suppliers were expected to continue to reallocate advanced process nodes and new capacity toward server and HBM products to support rising AI server demand in 1Q26, and U.S.-based cloud providers had been pulling in orders, creating increased demand for server DRAM since late 2025, in TrendForce's January forecast.

Server DRAM prices were projected to surge by more than 60% QoQ in 1Q26, in a 5 January 2026 TrendForce forecast, as U.S.-based CSPs were locking in capacity and other buyers were being forced to accept higher prices.

The global server market is expected to reach its peak in 2026 as North American CSPs speed up investments in AI infrastructure, in TrendForce's January forecast.

Increases are expected to moderate, but conventional DRAM contract prices are still projected to grow 10 to 15% QoQ in 4Q26 in TrendForce's 30 September 2026 forecast, and server DRAM is expected to remain undersupplied in 4Q26. PC OEMs continue to procure aggressively amid expectations that DRAM supply will remain tight in 2027.

Improving server CPU availability has prompted CSPs and server OEMs to increase bit procurement from suppliers to meet RDIMM demand for general servers supporting agentic AI workloads, in TrendForce's 30 September forecast. Price increases for some suppliers are expected to lag the market average due to pricing mechanisms stipulated in long-term agreements (LTAs).

These are market-wide memory forecasts, not Zoho's server invoices.

We have also told our employees that we cannot have our usual pay increase this year. I have apologised for not being able to avoid this, Zoho founder Sridhar Vembu wrote on X.

Is Zoho Laying Off Staff?

Zoho has held off on pay hikes rather than cut jobs outright. The commitment in the post is that Zoho will work hard to avoid mass layoffs. Vembu paired it with a warning that the outlook for software jobs in general is grim.

Zoho has long prided itself on a no-layoffs stance, and Vembu once took the view that he would rather take a hit to profits than cut jobs. He has previously been vocal about his opposition to job cuts at profitable companies, and he has criticized Freshworks sharply for laying off employees.

Zoho has never carried out mass layoffs in its three-decade history. The freeze lands while the software industry globally is grappling with surging AI infrastructure costs even as AI-driven efficiency gains and automation put pressure on traditional engineering headcount, according to OfficeChai.

The usual annual pay increase is off this year, jobs have not been cut outright, and the founder's pledge is to work hard to avoid mass layoffs.

What Does Flat Headcount Mean for People Hoping to Join Zoho?

Zoho has not been growing its employee count for 18 months. That is a sharp shift for a company that was hiring thousands of employees a year as recently as a few years ago, according to OfficeChai.

Zoho's careers page has a View Open Roles link and invites people who cannot find a match to register on our Candidate Portal and get notified when new roles that match your skills open up. Zoho has offices in Chennai, Tenkasi, Singapore, Texas and Dubai, with the Chennai office at Estancia IT Park on GST Road in Chengalpattu District and the Tenkasi office at Silaraipuravu Village, Mathalamparai.

Zoho thinks beyond the system of credentialism in hiring, by its own account, and values people who bring diverse interests, skills, and a willingness to learn.

What Did the Internal Email Add to the Public Post?

A separate internal email gave more detail on the business. In that email, which was accessed by ET Now, Zoho is still growing at 12%, but growth slowed more than expected in September, especially in new revenue and customer acquisition.

Vembu also addressed pay in the email, where he apologised that Zoho does not have a compensation and annual appraisal review this year.

Vembu named a competitive threat in the email too. Some customers are opting out of Zoho's software products and going for AI-built alternatives made through vibe coding, which means generating code with simple AI prompts instead of traditional development. Vembu also wants engineers to use these tools while having a full understanding of the code and responsibility for it.

I do not want to take your loyalty for granted and I do feel pain that I have let you down, Vembu wrote in an internal email accessed by ET Now.

How Does a Skipped Raise Compare With Pay Across Indian Tech?

Salaries in India are projected to increase by 9.1 percent in 2026, in Aon's Annual Salary Increase and Turnover Survey 2025-26 India released in February 2026, up from an actual average increment of 8.9% recorded in 2025.

The survey, now in its 32nd edition, analysed data from more than 1,400 organisations across 45 industries.

Tech pay varies by business model in that survey. Technology consulting and services firms are projected to see lower increases at 6.6%, down from 7% in 2025, while the Technology Platform and Products category is projected at 9.4 percent for 2026, after 9.2 percent in 2025. Global Capability Centres sit close to that, at 9.2 percent actual in 2025 and 9.3 percent projected for 2026.

These are projections from a survey published before this announcement, not a measure of what Zoho staff would have received. The highest projected rises are in NBFCs and real estate, where pay hikes in NBFCs are expected to average 10.1%, while real estate and infrastructure firms may offer 10.2%. Overall attrition in India also declined to 16.2% in 2025, from 17.7% in 2024 and 18.7% in 2023.

The standardised definition of wages and expanded social security provisions are prompting employers to reassess compensation structures under India's newly notified labour codes, according to Amit Kumar Otwani, associate partner at Aon India.

Has Vembu Warned About Software Jobs Before?

He has. In a February 2026 post, Vembu's advice to software engineers was that it is best for those of us who depend on writing code for a living to start considering alternative livelihoods. I include myself in this.

In a follow-up post, he wrote that he was not confident enough to assert that paid programmer jobs will increase or even remain the same number as today, and he compared programmers to weavers, writing that weavers did not benefit from clothes becoming plentiful and cheap. Those February remarks pointed to AI-built apps and Anthropic's AI-created C compiler, and they triggered sharp debate across India's developer community.

Where Does Marketing Fit in Zoho's Spending?

Marketing is the only budget the post names. Zoho has cut down on its marketing budget, alongside the pay decision.

Zoho invests more in customer support and product development than in sales and marketing, by its own account, and prefers to build things itself instead of growing through acquisition.

Zoho has never taken money from investors, by its own account, and calls itself a private company with a public vision.

What This Means for Zoho Employees and Software Job Seekers, and What Should You Do Next?

Staff are getting no usual pay increase this year while the company pledges to work hard to avoid mass layoffs. With the industry grappling with surging AI infrastructure costs, holding off on pay hikes rather than cutting jobs outright reflects an attempt to balance these pressures, according to OfficeChai, though Vembu's own post says the outlook for software jobs in general is grim.

• If you work at Zoho, plan for flat pay this cycle. No compensation and annual appraisal review is happening this year, so budget around your current salary and keep a record of your work.
• Do not read the post as a layoff notice. Jobs have not been cut outright, and Zoho's pledge is to work hard to avoid mass layoffs. Keep your resume current.
• If you want to join Zoho, use the candidate portal. With headcount not growing for 18 months, register on the Candidate Portal to be notified when a matching role opens.
• Use a pay benchmark when you move. Pay rises at technology platform and products firms in India are projected at 9.4 percent in 2026 by Aon, a useful figure when you negotiate salary in an interview.
• Build AI skills that come with understanding. Vembu wants engineers to use AI tools while having a full understanding of the code and responsibility for it. Look for skills training programs that teach that understanding, not only tool use.

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People Also Asked

Q: Is Zoho giving salary hikes this year?

A: No, Zoho has told its employees that it cannot have its usual pay increase this year, and none of the reports linked here describes a bonus or perk offered in its place.

Q: Is Zoho planning layoffs?

A: Zoho has held off on pay hikes rather than cut jobs outright, and the company says it will work hard to avoid mass layoffs, though Vembu also described the outlook for software jobs as grim.

Q: Why is Zoho skipping pay raises this year?

A: Vembu cited a massive 4-fold increase in server prices that Zoho needs for its data centres, rapidly rising AI usage costs and a challenging geopolitical backdrop.

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