'Please Don't Lecture Me On Socialism': Zoho's Founder Sridhar Vembu Lashes Out On Comments About Capitalism; Advocates For Employee-Centric Growth

Zoho founder Sridhar Vembu has sparked conversations about corporate responsibility and the essence of capitalism with a series of posts on X, formerly known as Twitter.

His most recent comments on November 9 followed a public debate about whether prioritising employee well-being contradicts capitalist ideals - a conversation triggered by a repost from Vijay Rayapati, CEO of Atomicwork.

Responding to the earlier post shared by Vembu on the platform X on November 8, Rayapati later wrote, "India is still a socialist country whether you are running a Sapadu shop or SaaS. Capitalism is not tolerated even by those reaping capitalism benefits."

The post by Rayapati received a lot of comments from netizens. Commenting on it, one X user wrote, "Capitalism is not about privatisation of profits and socialisation of losses In long term, people who do right by all stakeholders win"

Another user chimmed in and responded, "Err, disagree. @svembu is asking if there are no new lines of investment for Freshworks. Its like questioning share buyback vs new investments/ideas (see what happened to Boeing). Ans might be "No, we desparately need profitability" But Q is not anti-capitalism"

Vembu's response and Critique of Layoffs

Vembu’s recent tweets align with a broader critique of Freshworks, a SaaS company founded by former Zoho employee Girish Mathrubootham.

Freshworks on November 7 announced plans to lay off 13 per cent of its workforce, which is around to be 660 employees. This announcement came off despite the company holds over a billion dollars in cash reserves.

However, Vembu questioned the underlying logic of such decisions, pointing outthat loyalty and long-term value cannot thrive in a workplace where employees feel expendable.

Taking to the platform X, Vembu on November 9 further posted as well reponding to Rayapati tweet , "You decide: am I a socialist to focus on the most important asset of any company - their own people and their well being?"

"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 added.

Vembu didn’t shy away from calling out Intel as an example of a company that succumbed to short-term financial pressures. “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,” he added.

Capitalism Redefined

He argued that the current form practiced in the U.S. distorts the original intent, transforming it into what he terms “financialism.” According to Vembu, this system encourages CEOs to reap immense personal profits while insulating themselves from risks through bailouts and federal support. He invoked the collapse of Silicon Valley Bank as an example of this paradox, noting, “A lot of tech entrepreneurs cheered [the bailout] on. They suddenly forgot ‘capitalism.’”

"Capitalism needs capitalists - people who own and risk their own capital,” Vembu wrote. He further criticised practices where profits are kept private but losses are passed on to taxpayers, questioning, “Does that sound like capitalism to you?”

"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 added further.

Netizens Reaction

His post garnered a lot of responses from netizens commeting their opinions and viewpoints.

An X user wrote, "Real capitalism thrives on talent, growth, and trust, not instability. This sort of "capitalism" erodes morale."

Another user added, "Excellent. We need to say this more often and educate our founders. We need to revive our ancient solid economy models of self reliance in people, community and institutions."