CNBC-TV18 has accessed a note written by Zoho founder and CEO Sridhar Vembu to employees.
Days after Software as a Service (SaaS) firm Zoho announced a slew of products and initiatives aimed at businesses and institutions battling COVID-19, CNBC-TV18 has accessed a note written by its founder and CEO Sridhar Vembu to employees, projecting a 50 to 70 percent fall in the company's revenues this year.
“We can expect sales to drop. How far could it drop? I am going to give you my pessimistic estimate first, because I want us to be prepared for that pessimistic scenario. Our revenue could drop by 50-70% in a very bad scenario,” Sridhar wrote on Zoho’s ‘Connect’ forum, an internal portal at Zoho that facilitates employee-management interaction.
Sridhar added, “I did not throw that estimate around to scare you. I simply want you to consider this as a possibility and mentally consider its consequences.” CNBC-TV18 has learnt that he made these projections to employees in mid-April, while discussing the impact COVID-19 could have on Zoho’s business.
While Sridhar’s comments are not surprising, given his recent take on the valuations at SaaS companies being put to the test in the light of COVID-19, Zoho’s revenue projections do not generally make it to the public domain. The company is fiercely bootstrapped and has shunned venture capital funding, on several occasions.
CNBC-TV18 reached out to Zoho Corp for a response to these projections. “It is part of our practice to openly and confidentially address topics that are important to our employees,” said a company spokesperson in a statement to CNBC-TV18, “We will not comment on this, or any other speculative internal posts or discussions, further.”
The spokesperson added that given Zoho’s survive-and-serve strategy during COVID-19, the company is focusing on serving the community. On April 29, Zoho announced it was making a foray into the edu-tech space with the launch of Zoho Classes, targeting millions of students across India.
The company has also launched Zoho Remotely, a remote work toolkit offered free of charge to all businesses until July 1. Around 15,000 businesses, including those in India, currently use the app. Zoho also announced the launch of its Small Business Emergency Subscription Assistance programme, which has benefited 10,000 small businesses, 12 percent of which are in India.