Zoho freezes annual pay increases as AI and server costs rise

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  Zoho will not give employees its usual annual pay increase this year, founder and chief scientist Sridhar Vembu said.

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  Vembu cited rising artificial intelligence and server costs, uncertainty in the software business and the geopolitical backdrop.

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  Zoho has also cut its marketing budget and has not increased its employee count for 18 months, he said.

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  Vembu said the company would work to avoid mass layoffs, but described the outlook for software jobs as grim.

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  He said Zoho was reinventing itself and that the next three to five years would show how the effort worked.

Who

Zoho Corp and its employees. Founder and chief scientist Sridhar Vembu announced the decision.

What

Zoho will not give its usual annual pay increase this year. It has also cut its marketing budget.

When

This year, according to Vembu’s post. The article was published on 13 October 2026.

Where

Zoho is a multinational technology company; the article does not state where the pay decision applies.

Why

Vembu cited rapidly rising AI expenses, a fourfold increase in server prices, an uncertain software business outlook and the geopolitical backdrop.

This story does not have two clearly opposing sides.