Zoho founder Sridhar Vembu on Tuesday said companies were increasingly blaming layoffs on artificial intelligence even though broader economic pressures were driving job cuts. He warned that the global economy was entering a more difficult phase.
“How is it that in the US, the AI leader, a good part of the population, even a lot of college students, have come to hate AI?” Vembu wrote on X. “It does not help that companies are blaming job losses on AI, which is both convenient and as an added bonus, makes a company look visionary.”
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Vembu said rising cost pressures – not artificial intelligence alone – were behind many layoffs.
“The layoffs are related to rising cost pressures – we experience those pressures too, so we know this firsthand. The economic picture is getting grimmer,” he wrote. He also warned that heavy investment in artificial intelligence could not indefinitely prop up economic growth.
“The AI investment bubble has kept the US economy afloat, but that can only go on for so long,” he said.
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The tech entrepreneur argued that the world was witnessing “the gradual collapse of the post World War 2 global economic and political order”.
“Before you think ‘orange man bad’, this process was well underway with the global financial crisis in 2008-9,” he stated. “That is why I said ‘zoom out’, think in decades. Note that the iPhone-unleashed mobile revolution did not prevent the GFC. AI will not magically cure global imbalances.”
“We must prepare for tough times ahead. I would be happy to be proved wrong, so please present ideas that disagree with this.”
Vembu’s comments come as several major US technology companies have linked layoffs and restructuring efforts to AI investments and automation.
Amazon last year said it would eliminate 14,000 corporate roles as it sought to operate more leanly and redirect resources toward AI initiatives.
Salesforce said AI agents were taking over some customer-service functions after cutting around 4,000 support jobs.
Other firms, including IBM, CrowdStrike, and Workday, have also linked layoffs to AI-led restructuring or investment priorities.
At the same time, analysts have argued that many of the job reductions also reflect post-pandemic over-hiring and corporate cost-cutting pressures.
According to consulting firm Challenger, Gray & Christmas, AI was cited in nearly 55,000 US job eliminations in 2025.
