Krutrim AI Faces Second Round of Layoffs, Cuts Over 100 Jobs Amid Strategic Realignment

Krutrim Lays Off Over 100 Employees 6 Months After Hiring | AIM

Earlier in June, the company eliminated more than a dozen positions. Krutrim, the AI firm founded by Ola's Bhavish Aggarwal, has laid off a significant portion of its linguistics team less than six months after their recruitment, as part of a strategy to maintain a leaner staff, the Economic Times (ET) has reported. This marks the second wave of job cuts, with the company reportedly having laid off over 100 employees last week. In the initial round in June, it had already eliminated more than a dozen positions. Based on documentation reviewed by ET, the layoffs stem from a shift in the company's organisational priorities due to external circumstances. Sources cited fundraising delays and insufficient traction for its products as underlying reasons. "In line with a strategic realignment and our dedication to effective capital utilisation, we are developing smaller, more agile teams. This adjustment aligns with shifting business needs and reflects our long-term goal of creating India's own comprehensive AI platform," Krutrim said in a statement to ET. While Krutrim originally set out to raise $500 million, the objective has been decreased to $300 million due to lukewarm interest from investors. The company's large language model and cloud offerings, which launched in 2024, have reportedly struggled to gain traction, as several startups have opted for more established platforms provided by global hyperscalers, the report added. Leadership changes have further compounded difficulties, with nearly a dozen senior executives leaving the company in 2024, and additional departures occurring early this year. Despite these operational disruptions, Krutrim continues to assert that Kruti is India's first agentic AI assistant, capable not only of responding to commands but also of performing tasks such as booking cabs, paying bills or ordering food. It presently supports 13 Indian languages. Krutrim aims to integrate Kruti into India's daily digital landscape by offering voice-driven services tailored to regional and non-English-speaking audiences.

Krutrim cuts more than 100 jobs in second round of layoffs - The Economic Times

Ola founder Bhavish Aggarwal's AI venture, Krutrim, has conducted a second round of layoffs, impacting a significant portion of its linguistics team hired just months prior. This follows an initial round of job cuts in June. The company cites strategic realignment and efficient capital deployment as reasons for building leaner teams.Krutrim, the artificial intelligence company launched by Ola founder Bhavish Aggarwal, has laid off a large portion of its linguistics team in less than six months after hiring them as part of strategy to keep leaner teams, people privy to the matter said. This is the second round of the layoffs, where the company laid off more than 100 employees last week, the people said. In the first round in June, it had cut over a dozen jobs, ET had reported. "As part of a strategic realignment and our commitment to efficient capital deployment, we are building leaner, more agile teams. This transition aligns with evolving business priorities and reflects our long-term vision to build India's own full-stack AI platform," Krutrim said in a statement to ET. The company did not respond to ET's specific queries on the number of people laid off and the reasons for that. But said in a statement that "urge you to refrain from publishing unverified reports that are not substantiated by accurate facts." ET reviewed multiple LinkedIn posts from Krutrim early this year, calling linguists for full-time roles in its AI training and evaluation teams in 10 Indian languages, such as Tamil, Odia, Telugu and Marathi. Many of those who took up the offers had moved to Bengaluru from different parts of the country, said the people ET spoke with. A Krutrim source had earlier told ET that the company employed about 600 people in the linguistics team. The layoffs began after the company launched the agentic AI assistant Kruti in June, said one of the people. "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 person added. According to documentation ET has reviewed, the layoffs have come on the back of a change in the company's organisational priority due to external factors. People ET spoke with cited funding delays and lack of traction for its products as the factors. Krutrim had reduced its fundraising plan to $300 million from $500 million due to lack of interest from the investment community, newspaper Mint had first reported. ET recently reported that its large language model and cloud product, launched in 2024, were not seeing traction due to lack of adequate technical maturity, with some startups moving to hyperscalers. Continued leadership exits also did not help. While close to a dozen executives across leadership roles left the company in 2024, some more left early this year, ET reported recently. Krutrim raised $50 million from Z47 Partners to become a unicorn in 2024. Early this year, launching Krutrim AI Labs, founder Aggarwal said in a post on X that the company was investing Rs 2,000 crore and would step this up to Rs 10,000 next year.