Bhavish Aggarwal’s artificial intelligence startup Krutrim AI, launched under the Ola umbrella, has completed its second round of layoffs, cutting over 100 employees—mostly from its recently expanded linguistics division. This follows an earlier wave in June that affected a dozen-plus roles. The reduction comes weeks after the debut of its AI assistant, Kruti, in June 2025.
Why the Layoffs?
- Completion of Language Training Phase
Krutrim had scaled its linguistics team aggressively across ten Indian languages (Tamil, Telugu, Odia, Marathi, etc.) to support Kruti’s development. As training nears completion (about 80% done), the need for such staff has dropped sharply. “They don’t need as many people as they did before,” insiders said. - Strategic Shift Toward Capital Efficiency
The company cited the goal of building leaner, more agile teams in line with changing business priorities, and optimized capital deployment within a capital-intensive AI race. - Funding Delays & Traction Challenges
Krutrim reportedly scaled back its target raise from US$500 million to $300 million due to weak investor interest. The product ecosystem has also struggled to gain momentum, causing a reassessment of staffing needs.
Layoffs at a Glance
| Aspect | Detail |
|---|---|
| Total Layoffs | Over 100 employees (second round) |
| Affected Team | Mainly linguistics (language training & evaluation) |
| Previous Layoffs | Dozens cut in June 2025 |
| Reason | Training complete; shift to leaner structure |
| Key External Pressures | Funding delays; weak traction for Kruti and cloud offerings |
| Remaining Workforce | ~600 linguists before reduction; overall staff ~1,000 |
What It Means
- The layoffs signal a pivot from rapid team buildup to resource discipline, as Krutrim operates within tighter financial and strategic constraints.
- With language training tasks largely completed, the focus now shifts to model refinement, deployment, and product-market fit.
- This shift underscores the broader placement of Krutrim in India’s quest to build a self-reliant AI stack—but highlights how capital-intensive and risky scaling remains.
Outlook & Strategic Direction
Despite setbacks, Krutrim continues to hire for core AI roles in Bengaluru, Singapore, and the U.S., focusing on GenAI research, cloud platforms, and speech recognition. The company also plans to expand its AI model portfolio (e.g. Krutrim V2, Chitrarth 1, Dhwani) and pursue chip and infrastructure development.
However, challenges remain—from leadership exits and funding gaps to skepticism about deliverables (e.g., some online feedback questioned Kruti’s performance in Indian languages).
Final Takeaway
Krutrim’s second round of layoffs—impacting largely temporary linguistics hires—reflects a recalibration following Kruti’s rollout. As AI assistants and multi-language LLMs mature, Indian startups are increasingly balancing scale with sustainability, striving to deliver product traction without overextending resources.
