'Not AI taking away jobs': Zoho's Sridhar Vembu details what's ailing the software job market

Sridhar Vembu, founder and Chief Scientist at Zoho, said on Tuesday that the software job market is struggling due to several reasons other than artificial intelligence directly causing job losses. He said in a long social media post that the job losses can be attributed to decades of inefficiencies in enterprise IT, driven by an excess of capital due to venture capital, private equity and IPOs. 

"What is ailing the software job market is not AI taking away jobs (not yet anyway),"Vembu wrote in his post on X. 

Vembu went onto explain how these funds were utilised for marketing to spread a fear of missing, uncertainty around the evolving nature of tech, and doubts among corporate customers, which led to ever growing IT spending. 

"Enterprise IT budgets kept rising because which CIO or Board would want to be seen as lagging? Major corporations in the West have layers and layers of duplicated IT systems, lots of money spent to acquire them and even more money spent to get the disparate systems to work together." 

He even mentioned that the more inefficient IT systems ended up becoming permanent resource drains, needing a vast number of employees to just keep them running. He also noted that in software, a 2 person team can outperform a 20 person team and a 10 person team can do the work of a 200 person team. 

"One of the deep facts about software is that often a 2 person team can solidly outperform a 20 person team and a 10 person team can do the work of a 200 person team. This is not just due to talent disparity - even when the large teams have equivalent talented people, they can easily end up being wasted on unproductive projects."

The Zoho founder further mentioned how IT firms in India absorbed these inefficiencies during their expansion but are now faced with a reality check as easy money dries up, which has prompted them to focus more on productivity. 

Instead of considering AI as the reason for job losses, Vembu said the technology offers productivity gains of upto 10-20 per cent currently. 

"Depending on the nature of a project AI can offer 10-20% productivity gains. Significant but not the 10x or 100x leap yet to destroy jobs on a vast scale. But those AI gains of today pale in comparison to the "multiplied inefficiencies" built up over decades."