Zoho is freezing annual salary hikes for all employees in 2026 as rising AI infrastructure costs and an uncertain software market put pressure on the software-as-a-service (SaaS) major’s spending.

Sridhar Vembu, the co-founder and chief scientist of Zoho, said that the company is “working hard” to avoid mass layoffs and has trimmed its marketing budget as part of its efforts to rein in spending even as growing AI usage pushes up expenses.

In a post on X on Tuesday, October 13, Vembu said that Zoho had not hired new employees in 18 months, offering a bleak picture of the software jobs market amid the AI boom. The company has over 19,000 employees worldwide, according to its official website.