Crisis deepens? Ola's Krutrim AI fires 50 percent employees, second layoff round this year

Krutrim has reportedly cut nearly half its workforce in its second restructuring round this year. The Bhavish Aggarwal-led AI startup is now narrowing its focus to cloud infrastructure and enterprise services.Crisis deepens? Ola’s Krutrim AI fires 50 percent employees, second layoff round this yearKrutrim is going through another reset. According to Economic Times, the AI startup founded by Bhavish Aggarwal has reportedly cut around 20 to 25 jobs, a reduction that amounts to almost half of its current workforce. The latest layoffs come only months after the company began pulling back from some of its more ambitious plans around AI and hardware. The startup has now carried out two rounds of restructuring this year. While the earlier exercise involved sales, go-to-market and business operations, the latest cuts have reached product and engineering teams. That makes the new round particularly significant, as it affects employees involved in building and developing Krutrim's technology.The changes point to a much more focused direction for the company than the one it started with. Krutrim had once pitched a broad vision for an Indian AI ecosystem, including its own foundation model and AI chips. Those plans have since been scaled back, with the company putting greater emphasis on AI cloud infrastructure and enterprise services.Its current focus includes Krutrim Cloud and Maps, giving the startup a narrower set of products to build its business around. The change comes as AI companies globally face pressure to turn expensive technology development into businesses that can generate sustainable revenue.Revenue is up, but external business remains a questionKrutrim said in May that its revenue for FY26 had crossed Rs 300 crore and that it had become profitable. On the surface, those numbers suggest the company has made progress towards building a commercially viable business. However, the composition of that revenue raises questions about how much demand Krutrim is generating outside its parent ecosystem. A person familiar with the matter told ET that roughly 90 per cent of Krutrim's revenue came from companies belonging to the Ola Group. The rest was generated from customers outside the group. That means winning more independent customers could be one of the biggest tests for Krutrim as it tries to build its cloud and enterprise business. The company will need to show that its products can find demand beyond the wider Ola ecosystem.Employees flag pending expenses and settlementsThe workforce reduction has also brought attention to complaints from employees and former staff. Employees have also flagged issues with pending work-related expenses. Claims for travel, hotel stays and other official costs are said to have remained unsettled for nearly five months. Some former staff members have also alleged that their exit payments took longer than expected, with the final dues reportedly released in multiple instalments. These issues add to the challenges facing a company that is trying to retain skilled employees while also building credibility with enterprise customers. Krutrim's restructuring is taking place against a difficult period for the Ola Group as well. Ola Electric has seen its market share decline over the last year, while its stock has lost more than half its value since its 2024 listing. The company has also faced regulatory and operational challenges.- EndsPublished By: Ankita GargPublished On: Jul 28, 2026 13:08 IST