- IT industry is creating far fewer jobs as companies divert spending towards AI and data centre infrastructure instead of expanding their workforce.
- While companies, including Zoho, have largely avoided layoffs, they have also not added significant numbers of new employees in recent years.
- Funds that would previously have been allocated towards hiring are now being channelled into AI investments and higher data centre costs, driven in part by steep increases in server and memory prices.
- Vembu questions whether the global software industry requires substantially more software, even though AI has made software development faster and more efficient.
- Vembu argues that the market has become increasingly saturated, shifting competition towards quality, reliability, and brand value rather than rapid expansion, resulting in slower growth prospects.
- Vembu doubts that manufacturing can absorb surplus labour, pointing out that automation has significantly reduced the number of jobs created even in large-scale industrial production.
- Vembu noted that proposals such as Universal Basic Income are increasingly being discussed globally, adding that similar forms of income support already exist in India through welfare programmes.
Sridhar Vembu, founder of Zoho, has expressed deep concerns regarding the stagnation of job creation in the IT sector, attributing this trend to a significant shift in budget allocations towards AI and data center infrastructure. In a recent post on X, he stated, “The real issue facing our nation is how to create jobs for our massive cohort of youth in this very uncertain global landscape.”24
Vembu noted that while Zoho has avoided layoffs, it has not added new employees in recent years. He emphasized that funds previously earmarked for hiring are now redirected towards AI investments and rising data center costs, exacerbated by steep increases in server and memory prices. “We are trying to control those costs but a lot of that is out of our control,” he remarked.3
The IT sector has seen a 6% decline in active job openings compared to last year, according to Xpheno’s Active Tech Jobs Outlook report, with only 44,000 roles available. Vembu questioned the necessity of creating more software in an already saturated market, stating, “While AI allows us to produce more software quicker, does the over-saturated global software market need a lot more software?”5
He also raised doubts about other sectors' ability to absorb surplus labor, citing automation's impact on job creation. Vembu suggested that discussions around Universal Basic Income (UBI) are becoming more relevant, noting, “Some people think the answer is Universal Basic Income (UBI) and some of that is already happening in India.”67
“Xpheno's Active Tech Jobs Outlook for August 2026 shows IT active openings down 6 per cent year-on-year at 44,000, even as overall tech roles rose 6 per cent to 1,09,000. Vembu also questioned whether an oversaturated global software market needs much more software, and said extensive automation means large-scale manufacturing produces few jobs.”
