Zoho founder Sridhar Vembu on X asked if he was a socialist to "focus on the most important asset of any company - their own people and their well being?"
On November 8, in an apparent criticism of Freshworks, Vembu said a company that had over a billion dollars in the bank and yet chose to prioritise shareholders by undertaking layoffs and announcing a buyback, should not expect its workforce to remain loyal.
Adding further to this, on November 9, he gave examples of companies like Nvidia and AMD. "..Take Nvidia and AMD. Ultimately they triumphed due to their engineers and crucially the engineers that stayed long term to work on deep tech. Their CEOs are from Taiwan. Now Taiwan itself has built incredible deep tech companies like TSMC, following a similar approach to talent - and Taiwan has about the same population as Sri Lanka. That is how real capital building works: take care of your employees, your most valuable asset and build long term successful companies.." he wrote in a post on X.
He then criticised Intel and said, "Intel took care of Wall Street instead, and they have lost comprehensively to TSMC, AMD and Nvidia. And now they have lost Wall Street as well. It is a perversion of the English language that we think of the late stage hedge fund and PE driven financialism as "capitalism".
Dennis Woodside, CEO of Nasdaq-listed Freshworks, announced on November 7 that the company will be trim down its workforce by 13 percent, which will see around 660 employees being laid off. The move is part of the SaaS firm's strategic priorities focused on improving efficiencies and reducing complexities across teams.
Speaking more on capitalism and socialism, he said, " Capitalism needs capitalists - people who own and risk their own capital. What we have today in America is "we bet other people's money and if we win we keep a lot of the gains and if we lose we run to the Fed to bail us out and we cheer on the Fed to keep asset valuations high so we can cash out our financial instruments - never ever let the stock market down and whatever happens CEOs should be paid 500x average employee wages!" Does that sound like capitalism to you? That is the system the US has practised for decades now. Even more of it is going to drive the country to a civil war.."
He then spoke about downfall of Silicon Valley Bank last year and said lot of tech entrepreneurs were happy about it. "Take the bailout of Silicon Valley bank last year. A lot of tech entrepreneurs cheered that on. They suddenly forgot "capitalism". Should India import this system? Refusing to do that is "socialism"? So please don't lecture me on "socialism". Practise some real capitalism first - take care of your people well. That is also our Dharma," he further wrote.
Zoho and Freshworks have a chequered and uneasy history. Freshworks founder Girish Mathrubootham previously worked at Zoho before starting up in 2010.The companies have been in battle since March 2020, after Zoho filed a lawsuit alleging that Freshworks stole its confidential information.
The two settled the case in 2021 when Freshworks admitted that a former employee of the company wrongfully accessed and used Zoho confidential information relating to sales leads.
