Ola’s artificial intelligence unit Krutrim has eliminated approximately 50 positions in its third layoff round since June, primarily targeting the linguistics division. The cuts include team leaders and transcribers specializing in regional languages like Bengali, Malayalam, and Punjabi, according to The Economic Times.
The latest reductions bring total departures to over 200 employees through layoffs and leadership exits. This workforce reduction coincides with Krutrim’s development of its most ambitious project yet: Krutrim 3, a multibillion-parameter large language model designed to boost the company’s AI capabilities.
Why Strategic Realignment Matters Now
A Krutrim spokesperson framed the cuts as strategic realignment to create leaner, more agile teams. “The current phase of the data annotation project involving in-house linguistics has been successfully completed,” the spokesperson stated. However, the company declined to address specific questions about layoff scale, leadership departures, or Krutrim 3’s progress.
The linguistics team now operates with skeletal staff after losing key personnel managing text-to-speech projects. This raises questions about project timelines as Krutrim races to complete its flagship AI assistant “Kruti”, which has recorded 270,000 downloads since June according to SensorTower data.
Leadership Exodus Compounds Challenges
Since April 2025, more than six senior executives have departed Krutrim. Notable exits include Goutham Ramkumar (director of evaluation and AI data), Rajesh Jayaram (senior director of platform hardware), and Vineet Agarwal (director of corporate finance and investor relations).
These leadership gaps follow over 20 management-level departures in FY25 alone. The exodus has sparked investor concerns about long-term stability as Krutrim navigates funding delays and limited product traction.
Market Performance Under Pressure
Krutrim’s core products face adoption hurdles. The company’s large language models and cloud services received a “tepid response” from industry players due to poor documentation and technical maturity issues. Some clients have switched to established providers like Amazon Web Services.
The AI assistant app Kruti has achieved 207,000 downloads, but this modest uptake reflects broader market challenges. Reports indicate that Krutrim’s cloud products struggle against established competitors with superior technical infrastructure.
Financial Reality Drives Restructuring
Despite achieving unicorn status in 2024 with $50 million funding from Z47 Partners, Krutrim faces significant financial pressures. The company originally targeted raising $1.15 billion by 2026, but funding delays have forced strategic pivots.
Founder Bhavish Aggarwal pledged his Ola Electric shares in December 2024 to secure debt funding for Krutrim. Earlier this year, he announced Rs 2,000 crore investment plans, scaling to Rs 10,000 crore next year through Krutrim AI Labs.
Building India’s AI Infrastructure
Beyond software, Krutrim develops “India’s first domestically designed and manufactured chips” called Bodhi. The company aims to deploy these chips for AI training by 2027-28, positioning itself as a comprehensive AI infrastructure provider.
This hardware push reflects Krutrim’s broader ambition to create full-stack AI solutions tailored for Indian markets. The focus on multilingual capabilities and voice-first interactions targets millions of Indians who primarily communicate in regional languages.
What Business Leaders Should Know
Krutrim’s restructuring highlights critical lessons for AI ventures. Even well-funded startups must balance innovation ambitions with financial discipline. The company’s experience shows that achieving technical milestones means little without market validation and sustainable business models.
The linguistic team cuts suggest Krutrim may shift toward automated data processing, reducing reliance on human transcribers. This pivot could accelerate development cycles while controlling costs, but may impact quality for regional language support.
Risks and Market Impact
The leadership exodus raises questions about Krutrim’s ability to execute complex AI projects. Building multibillion-parameter models requires stable technical teams with clear roadmaps. Continued departures could delay Krutrim 3’s launch and undermine competitive positioning.
For India’s broader AI ecosystem, Krutrim’s struggles demonstrate the challenges of competing with global tech giants. Despite significant funding and market opportunity, execution remains the determining factor for success.
Industry observers note that AI ventures require sustained capital investment over multiple years. Krutrim’s current turbulence may reflect natural growing pains as the company matures from startup to scaled operation.
The company maintains its commitment to AI innovation despite current setbacks. Success in completing Krutrim 3 and achieving market traction will determine whether this restructuring enables sustainable growth or signals deeper structural challenges.
As Krutrim navigates this critical phase, its journey offers valuable insights into the realities of building AI companies in emerging markets. The balance between technological ambition and operational efficiency remains crucial for long-term viability.
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