Zoho Freezes 2026 Salary Hikes as AI Infrastructure Costs Surge Fourfold

Zoho has suspended annual salary increases for 2026 and cut marketing spending to absorb soaring artificial intelligence and data center costs, co-founder Sridhar Vembu announced, as the Indian software company works to avoid mass layoffs amid mounting operational pressures. Server and memory prices have climbed fourfold, driving a sharp rise in the company's infrastructure expenses at a time when AI adoption is accelerating, Vembu said. Employee benefits costs surged to Rs 4,347 crore in fiscal 2025 from Rs 3,372 crore in the prior year, while total operating expenses grew 30.5% year-on-year.