According to reports from Times Now, Zoho co-founder and Chief Scientist Sridhar Vembu has emphasized the urgent issue of job creation in light of AI's rapid development in software and its impact on hiring in the IT sector. Vembu revealed that the IT industry, including Zoho, has not been laying off employees, but it also has not been hiring many new people in recent years. As reported by Business Standard, Vembu noted that the money that would have gone to new employees is now going to AI and data centre costs, with the latter due to steep rise in server and memory prices. The co-founder argued that India's biggest concern is no longer whether AI can write code, but whether the economy can generate enough jobs for its growing young population in an increasingly uncertain global environment. Vembu expressed that while the company is attempting to manage these expenses, many factors remain beyond their control. In a recent social media post on X, Vembu explicitly stated that "the real issue facing our nation is how to create jobs for our massive cohort of youth in this very uncertain global landscape. Sadly, the IT industry, including Zoho, have not created many jobs in recent years."
As reported by Times Now, Vembu questioned whether faster software development automatically translates into greater demand, noting that the software market is becoming increasingly crowded, meaning businesses may focus more on quality, reliability and brand reputation rather than simply producing more applications. According to Business Standard, Vembu questioned the need for increased software production in the current environment, asking while AI allows companies to produce more software quicker, does the over-saturated global software market need a lot more software? He expressed uncertainty about the financial returns for AI companies that are currently borrowing and spending heavily on capital expenditure. The focus is shifting to quality, reliability, and brand, which will lead to much slower growth in the sector, similar to any commodity industry where the focus is shifting to quality, reliability, and brand, which will lead to 'much slower' growth. This represents a fundamental shift from volume-based growth to quality-focused development.
According to Times Now, enterprise customers are shifting their own technology budgets towards AI, creating additional pressure on traditional IT employment. As reported by Business Standard, Vembu remarked that it is not clear they will achieve the massive profits they need to justify all the capex, highlighting the financial uncertainty surrounding AI investments. The shift in spending priorities reflects the industry's pivot toward artificial intelligence capabilities and infrastructure requirements, with enterprise customers redirecting their own IT spending towards AI development. This trend compounds the employment challenges as companies redirect funding from human resources to AI infrastructure and development.
As reported by Times Now, Vembu expressed doubt that manufacturing could pick up the slack, noting that automation has significantly reduced the number of jobs created by large-scale production. According to Business Standard, he observed that while advanced technology makes goods more affordable by lowering production costs, it creates a structural challenge for the economy regarding income distribution. Vembu noted that the 'only' question is how the economy is structured so people have the income to afford those affordable goods, adding that while the question is simple in theory, it is difficult in practice. He acknowledged that some see Universal Basic Income (UBI) as one possible solution, adding that similar welfare measures already exist in India in different forms, though he stopped short of endorsing any single answer. He suggested that political pressure to expand such measures is likely to increase as the challenge of employing the nation's youth persists in an uncertain global landscape.
