New Delhi, July 28 – In a move that’s sending ripples across India’s tech ecosystem, Bhavish Aggarwal-led AI venture Krutrim has reportedly initiated a second wave of layoffs, targeting a major chunk of its linguistics team. While the company calls it part of a strategic restructuring, the scale and timing of the job cuts have raised questions about shifting priorities in the AI race.
Credits: Latestly
Krutrim’s Leaner Future: Over 100 Roles Axed
According to a report by The Economic Times, Krutrim has laid off over 100 employees, many of whom were brought on board just a few months ago. The majority of these affected staff belonged to the linguistics department, which was tasked with training Krutrim’s multilingual AI assistant across Indian languages like Tamil, Odia, Telugu, and Marathi.
Sources indicate that the layoffs reflect a broader internal move to “streamline operations” and “build lean and agile teams”, a common refrain among tech companies pivoting from aggressive hiring to operational discipline.
AI Agent ‘Kruti’ and the Tipping Point
The layoffs come on the heels of Krutrim launching its much-anticipated agentic AI assistant, Kruti, in June 2025. The company reportedly stated that about 80% of the training for Kruti is complete, which may have prompted the decision to trim the linguistics team that had played a crucial role in the early development stages.
Industry insiders believe that with the foundational language models in place, the need for full-time linguists across 10 Indian languages may have diminished — especially if Kruti is moving from development to deployment and scale.
From Unicorn to Uncertainty?
Krutrim, which achieved unicorn status in 2024 after securing $50 million in funding from Z47 Partners, had been building one of the largest linguistics teams in the Indian startup space, reportedly employing over 600 people in that department alone.
However, the recent layoffs suggest a realignment of priorities, likely influenced by external market pressures and internal cost optimization goals. In a fast-evolving AI landscape, adaptability seems to be the mantra — but it comes at a human cost.
Official Silence and PR Pushback
Despite growing chatter in the startup ecosystem, Krutrim has not confirmed the exact number of layoffs. The company issued a statement urging media houses to refrain from “publishing unverified reports not substantiated by accurate facts.” However, they did acknowledge ongoing internal changes meant to enhance operational efficiency and sharpen focus on “key goals.”
The statement added that the reorganization is “aligned with Krutrim’s long-term ambition to develop a complete AI ecosystem built entirely in India.” In essence, the company appears to be transitioning from a research-heavy phase to a productization-focused one.
The Bigger Picture: AI Disruption and Job Realignment
Krutrim’s layoffs come at a time when AI is reshaping job markets globally. Recently, TCS announced a 12,000-employee layoff, prompting questions about whether AI automation is making certain human roles redundant. Even tech giants like Microsoft have resorted to similar measures, with CEO Satya Nadella addressing widespread job cuts in a company-wide memo.
The underlying message across these announcements is clear: as AI systems become more capable, companies are re-evaluating workforce compositions to focus on agility, efficiency, and scale.
Credits: NewsBytes
What Lies Ahead for Krutrim?
While the layoffs are unfortunate, they also signal that Krutrim is nearing a critical product milestone. If Kruti can deliver on its promise of a powerful, multilingual AI assistant truly made in India, it could position the startup as a key player in the global AI ecosystem.
For now, though, the mood remains cautious. As the startup trims down its workforce, the real test will be whether its vision for an indigenous AI ecosystem can be realized — and whether it can do so without losing the human capital that helped build it.
