QUICK TAKE
- Krutrim eliminated 50 positions in linguistics division during third layoff round since June
- Total workforce departures exceed 200 employees including 20+ management exits in FY25
- Six senior executives departed since April amid funding delays and product traction issues
- AI assistant Kruti recorded 270,000 downloads but faces adoption challenges in competitive market
- Company developing multibillion-parameter Krutrim 3 model while addressing operational instability
Ola’s artificial intelligence subsidiary faces mounting operational challenges as workforce reductions coincide with leadership exodus and funding pressures, according to Economic Times analysis.
Ola’s AI unit Krutrim has carried out its third wave of job cuts since June, axing roughly 50 positions mainly from its linguistics team. The layoffs push total departures past 200 employees through cuts and leadership departures, exposing deep operational troubles at the Indian AI unicorn.
The affected positions include team leaders and transcribers who specialized in regional languages like Bengali, Malayalam, and Punjabi. A Krutrim spokesperson framed the cuts as strategic realignment to build “leaner, more agile teams,” saying that “the current phase of the data annotation project involving in-house linguistics has been successfully completed.”
Leadership Exodus Compounds Stability Concerns
Since April 2025, more than six senior executives have left Krutrim, creating major leadership gaps during a crucial development phase. Key departures 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 exits follow over 20 management-level departures in FY25 alone, raising investor worries about long-term stability as Krutrim deals with funding delays and weak product traction. The linguistics team now runs on skeleton staff after losing key people who managed text-to-speech projects.
Development Push Continues Amid Operational Challenges
The job cuts happen alongside development of Krutrim 3, a multibillion-parameter large language model designed to boost the company’s AI capabilities. However, the company refused to answer specific questions about layoff numbers or project progress, creating doubts about project timelines.
Krutrim’s main products face serious adoption problems in the competitive AI market. The company’s large language models and cloud services got a “tepid response” from industry players due to poor documentation and technical maturity issues, with some clients moving to established providers like Amazon Web Services.
Market Performance Shows Mixed Results
The AI assistant app Kruti hit 270,000 downloads since June, according to SensorTower data, but this modest uptake shows broader market challenges. Reports suggest that Krutrim’s cloud products struggle against established competitors with better technical infrastructure.
Despite reaching unicorn status in 2024 with ₹415 crore funding from Z47 Partners, Krutrim faces significant financial pressures. The company originally planned to raise ₹9,570 crore by 2026, but funding delays have forced strategic shifts.
Financial Strategy and Hardware Innovation
Founder Bhavish Aggarwal pledged his Ola Electric shares in December 2024 to secure debt funding for Krutrim. Earlier this year, he announced ₹2,000 crore investment plans, scaling to ₹10,000 crore next year through Krutrim AI Labs.
Beyond software development, Krutrim is building “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 tailored for Indian markets.
Strategic Implications for AI Sector
Krutrim’s restructuring highlights critical challenges for AI ventures in emerging markets. The linguistics team cuts suggest the company may shift toward automated data processing, reducing reliance on human transcribers while controlling costs.
This pivot could speed up development cycles but may hurt quality for regional language support, crucial for millions of Indians who primarily communicate in regional languages. The leadership exodus raises questions about Krutrim’s ability to execute complex AI projects requiring stable technical teams.
For India’s broader AI ecosystem, Krutrim’s struggles show the challenges of competing with global tech giants. Despite significant funding and market opportunity, execution remains the deciding factor for success in the competitive AI landscape.
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, though the balance between technological ambition and operational efficiency remains crucial for long-term viability.
As Krutrim navigates this critical phase, success in completing Krutrim 3 and achieving market traction will determine whether this restructuring enables sustainable growth or signals deeper structural challenges in building AI companies for emerging markets.
