Bhavish Aggarwal’s Krutrim Implements New Round of Layoffs, Cuts Over 100 Jobs

Krutrim, the artificial intelligence (AI) startup established by Ola founder Bhavish Aggarwal, has reportedly laid off over 100 employees in its second round of job cuts, as per a report by The Economic Times. These recent layoffs come merely weeks after the company’s first round of downsizing in June, where over a dozen positions were eliminated. This time, the layoffs have heavily impacted the linguistics team—a group that had only recently joined the organization—indicating a rapid shift in internal priorities.

The layoffs reportedly form part of a larger “strategic realignment” within the company, aimed at optimizing resource allocation and building leaner, more efficient teams. Sources familiar with the developments suggested that the restructuring is intended to align team strength with the company's evolving project requirements and budget constraints.

This wave of job cuts follows the launch of Krutrim’s proprietary AI assistant named Kruti, which was unveiled in June. As per insiders, nearly 80% of the training required for Kruti has been completed, significantly reducing the company’s immediate need for an extensive linguistics workforce. One person cited in the Economic Times report noted that, “Almost 80% of the training has been done for the AI assistant Kruti and they don’t need as many people as they did before.” This implies that the company had ramped up its linguistics hiring temporarily during the initial development and training phases of the AI model but is now pivoting to a leaner operational model as the assistant nears readiness.

Despite these layoffs, Krutrim continues to show strong financial backing and ambitious growth plans. Earlier this year, Bhavish Aggarwal launched Krutrim AI Labs, dedicating ₹2,000 crore (approximately $240 million) to AI research and development. The company has also stated plans to expand this investment up to ₹10,000 crore in the coming years. Additionally, Krutrim raised $50 million in funding from venture capital firm Z47 Partners, which led the startup to achieve “unicorn” status in 2024—a designation given to startups valued at over $1 billion.

The company’s current actions suggest a strategic shift in focus from rapid team expansion and aggressive hiring to capital efficiency and sustainable growth. With the global tech industry facing increasing pressure to reduce costs, many startups and even large tech corporations are implementing hiring freezes or downsizing to conserve cash and remain agile. Krutrim’s move appears to be in line with this broader industry trend.

The layoffs, while significant, are being interpreted not as a sign of trouble but as a recalibration of operations in response to product maturity and market conditions. As Kruti nears full deployment and Krutrim transitions to the next phase of AI innovation, the company aims to concentrate its resources on long-term technological scalability and financial efficiency.

In summary, Krutrim’s recent job cuts highlight the challenges tech startups face in balancing growth with operational efficiency. With strong funding, visionary leadership, and a maturing product line, the company appears focused on sustaining momentum while streamlining its workforce to align with future goals.