Krutrim Layoffs: Bhavish Aggarwal's AI Startup Cuts Nearly Half Its Workforce in Second Restructuring
Bhavish Aggarwal’s AI startup Krutrim laid off 20 to 25 employees, cutting nearly half its workforce in its second restructuring of 2026. The firm is pivoting to cloud services, though most revenue currently comes from the Ola Group. The reduction signals a much deeper operational contraction at the firm as it pivots away from its initial, broad ambitions.
Artificial intelligence startup Krutrim, founded by Bhavish Aggarwal, has initiated another round of layoffs, cutting approximately 20 to 25 jobs - a reduction that slashes nearly half of its remaining workforce. The cuts mark the company's second major restructuring exercise this year as it continues to pull back from expansive hardware and model-building goals.
While an earlier restructuring phase largely impacted sales, go-to-market, and business operations, this latest round has directly hit core product and engineering teams. The reduction signals a much deeper operational contraction at the firm as it pivots away from its initial, broad ambitions. Krutrim AI Lab: Ola CEO Bhavish Aggarwal Releases Open-Source AI Models with Focus on 'Developing AI for India'.
Strategic Pivot Toward Cloud Infrastructure
When it launched, Krutrim pitched an expansive vision for an indigenous Indian AI ecosystem, which included developing its own foundation models and semiconductor chips. Those plans have since been sidelined. The startup has narrowed its operational focus primarily to AI cloud infrastructure and enterprise services, centring its current business model around offerings like Krutrim Cloud and Maps. This shift mirrors broader global pressures on AI ventures to pivot from capital-intensive research toward sustainable, revenue-generating commercial operations.
Revenue Composition and External Demand
In May, Krutrim reported that its revenue for fiscal year 2026 had crossed INR 300 crore and that the company had achieved profitability. However, industry reports indicate that approximately 90 per cent of that revenue originated from companies within the wider Ola Group, with only a small fraction coming from independent external clients. Expanding its client base beyond the parent ecosystem remains a critical hurdle. Proving that its cloud and enterprise products can capture sustainable, independent market demand will serve as a definitive test for the startup moving forward.
Operational Grievances and Broader Group Pressures
The workforce reduction has also brought to light internal grievances concerning administrative delays. Current and former employees have flagged unpaid work-related expenses, including travel and hotel claims, which have reportedly remained unsettled for nearly five months. Additionally, former staff members have alleged delays and instalment-based disbursements regarding their final exit settlements. Bhavish Aggarwal Faces Arrest? Bailable Warrant Issued Against Ola CEO, Know Why.
The restructuring unfolds during a challenging period for the broader Ola Group. Sister firm Ola Electric has encountered declining market share over the past year, alongside a sharp contraction in its stock value following its 2024 market debut amid heightened regulatory and operational scrutiny.
(The above story first appeared on LatestLY on Jul 28, 2026 03:43 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).
