In recent times, various IT companies and tech companies have increased their layoffs.
While artificial intelligence technology has been said to be the reason for this, Zoho founder and its chief scientist Sridhar Vembu has made a huge post on his X page stating that AI is not the only reason for this. Sridhar Vembu said that the current challenges in software employment are due to the structural problems in IT companies. Sridhar Vembu, who has worked in the software industry for almost 30 years, said that the reason for this problem is the private equity and IPO funding for enterprise software in the last few decades. He said that the influx of excessive funding has made enterprise software inefficient. He said that excessive capital has led to an artificial expansion in the software industry, which has created a market with fake IT systems, overstaffing and perverse incentives. He said that the main reason for this is the very aggressive marketing of software vendors. He said that companies have long relied on tactics that create fear, uncertainty and doubt in customers, which encourages them to increase their IT spending.

That is, software companies that sell software use marketing tactics such as fear (i.e. what if they disappear) and uncertainty (technology is changing, you definitely need us) and doubt (are you confused, trust us). How is there so much gold in Africa alone? And yet it is so expensive..? Why? Many companies are increasing their IT spending, he said. Large companies, especially those in the West, are getting caught up in such marketing and acquiring new software solutions, which has led to even higher costs of integrating and maintaining these complex systems, said Sridhar Vembu. He said that fake IT infrastructures do not streamline operations, which is why human capital is needed to keep them running. He said that such companies, aiming to maintain IT budgets in dollar terms, have outsourced a large part of their workload abroad, further increasing inefficiencies. He also said that Indian IT companies often allocate three or four times the number of workers to increase billing time for a process that would require five people in the West.

As a result, the Indian software job market has been left unfocused on real productivity gains, he said. Sridhar Vembu, who notes that Indian banks and financial institutions have demonstrated high IT performance with significantly lower budgets compared to their Western counterparts, said that the cost-effective solutions developed by Indian banks and financial institutions are an example of this. Gold and Vishnu are one.. Boldly invest in gold – Lakshmi Iyer Another fundamental problem in the current software industry is the lack of incentives to improve performance, he said. In IT services, billing is often based on the hours worked by employees, which is the cause of the problem, he said. Explaining that Indian companies are constantly increasing their headcount, there is no need for this, Sridhar Vembu said that the inefficient structure in the IT sector creates the impression that more people are needed. Now AI is entering this equation and that AI is not taking away human jobs on a large scale, but it is making its impact in the sector, Sridhar Vembu said. He said that artificial intelligence technology makes it easy to do various tasks, including coding, that humans often have to do. He said that artificial intelligence technology helps to improve the efficiency of human work by 10% – 20%.

He said that during both the global economic crisis of 2008 and the Corona pandemic, a large amount of money went towards IT services. But now, IT companies have become easy to get money, which is why job opportunities in the software market have become challenging, he said. Artificial intelligence technology can replace certain tasks in IT work with talent instead of humans.It can be done, but the biggest challenge for humans right now is this IT service-oriented structure, he said. He said that this will change when we work based on performance rather than just the number of employees. This post by Sridhar Vembu has also caught the attention of many. Zoho founder Sridhar Vembu is active on social media. He shares his views and ideas on current affairs, economy, IT sector, etc. Sridhar Vembu, who completed his studies at IIT Madras, started a software company in 1996. In 2009, it was renamed Zoho.