Zoho Founder Sridhar Vembu Says AI Is Slowing IT Hiring, Raises Questions Over India’s Job Future

Zoho founder Sridhar Vembu has raised concerns about the future of job creation in India’s technology sector, saying that while artificial intelligence is improving productivity, it is also reducing the pace of hiring as companies increasingly allocate resources toward AI infrastructure instead of expanding their workforce.

In a post shared on X, Vembu said India’s biggest economic challenge is creating enough jobs for its growing youth population amid an increasingly uncertain global environment.

“Sadly, the IT industry, including Zoho, have not created many jobs in recent years. We have not laid off people but we are not creating new jobs either,” he wrote.

According to Sridhar Vembu, the money that would traditionally have been spent on hiring new employees is now being redirected toward AI development and rising data centre costs. He noted that expenses related to servers and memory have increased significantly, making AI infrastructure a major area of investment for technology companies.

While acknowledging that artificial intelligence enables software companies to develop products faster, Vembu questioned whether the global software industry actually requires significantly more software. He argued that software has increasingly become a mature market where growth is driven by factors such as product quality, reliability, and brand rather than rapid expansion in demand.

Vembu also pointed out that enterprise customers are shifting a larger share of their IT budgets toward AI initiatives. At the same time, he observed that many AI companies are investing heavily in computing infrastructure, raising questions about whether future profits will justify the substantial capital expenditure required to build and operate advanced AI systems.

Beyond the software sector, he highlighted automation as another factor reshaping employment. According to Vembu, modern manufacturing is becoming increasingly automated, allowing higher production with fewer workers. While he described this as a positive development from an economic perspective because it makes goods more affordable, he said it raises a much larger challenge: ensuring people continue to earn enough income to participate in the economy.

“The ‘only’ question is how the economy is structured so people have the income to afford those affordable goods,” Vembu wrote, adding that although some advocate Universal Basic Income (UBI) as a solution, the issue remains far from settled.