Zoho, the Chennai-headquartered Software as a Service (SaaS) company, won’t lay off employees, its co-founder and CEO, Sridhar Vembu, has said.

Reason, the company has diversified in terms of product portfolio, geographic coverage of revenue and regions, including rural centres. Nearly 2,000 employees are in rural centres, of whom 40 per cent are in Tenkasi, he told newspersons in Tenkasi. 

Vembu’s remarks come in the backdrop of many companies, including two Chennai-based firms Freshworks and Chargebee, in the Software as a Service (SaaS) space recently announcing layoffs.

Vembu said, “We will diversify in Tirunelveli, Madurai, Coimbatore, Tiruchi, Thanjavur, and in Eastern and Central UP.”

Zoho reiterated its commitment to investing in R&D and people. In the last six months it has opened two ‘hub’ offices in Tiruppur and Trichy; and plans offices in Tirunelveli and Madurai districts in Tamil Nadu, as well as one in Uttar Pradesh. Zoho is also expanding its current facility of Kalaivani Kalvi Maiyam, a learning centre opened during the pandemic to educate young children from the villages in and around Tenkasi.  

Read more: Zoho’s Marupadi initiative aims to bring women back into the workforce

“We are at a time of increasing economic uncertainty. In addition, powerful Artificial Intelligence technology could transform the way we work, presenting both huge challenges and opportunities. We are busy reinventing ourselves, and our history of previous reinventions and our strong culture of R&D remain as relevant as ever during this reinvention,” Vembu said.

Growth areas

For most public SaaS companies, growth comes mainly from G7 countries, while for Zoho it will be from India, West Asia, Latin America and Africa. It was an early focus for Zoho and is paying well. “We are seeing signs that things will stabilise. For instance, in Mexico, Zoho is the strongest SaaS player. Similarly, Zoho has offices in Brazil and Columbia. “That’s why I call it rooted and connected. That is also paying off well now. We started it five years ago,” he added.

In the SaaS industry, Zoho’s competitors spend a minimum of 40 per cent on maqrketing, while Zoho spends less than 30 per cent. This was when the company announced a new logo. While competitors would have a multi-million dollar marketing spend, we are putting that to different purposes.

Also read: Zoho will create more jobs in rural centres: Sridhar Vembu

“In the short term, Zoho has sacrificed a lot of growth. We are glad that we sacrificed, as we are seeing ourselves emerging stronger now.

“As we did not spend money marketing, our customer base is different from others. Zoho’s revenue from the US is smaller than that of its competition. For example, Salesforce gets nearly 60 per cent revenue, while Zoho gets 38 per cent. This has also proved good for the company as recent data says that the GDP of the BRICS countries has for the first time exceeded the GDP of the G7 countries. India is the hottest market, and Latin America and Africa are emerging growth markets,” he said.

For Zoho, after the US and European Union, India is in the third position. India will be number 2 in three years, while in 7-10 years, it will be number one. “That’s a major transformation for the company. Ten years ago, 2 per cent of revenue was in India, which is now the hottest market globally,” he said. Within India, smaller towns are where the growth will be faster than in the major cities, he added.

(Zoho sponsored this writer’s trip to Tenkasi).

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