India-based AI company Krutrim, part of the Ola Group, has laid off over 100 employees, mostly from its linguistics division, in a second round of downsizing. This restructuring comes as Krutrim nears completion of training for its AI assistant Kruti and struggles with fundraising and product traction.
India’s ambitious AI startup, Krutrim, part of the Ola Group, has initiated a major restructuring effort, laying off over 100 employees in its second round of workforce reduction. The layoffs primarily affected the linguistics team working on the multilingual AI assistant Kruti, which the company continues to position as India’s answer to globally established models.
The company stated the move is a “strategic realignment” aimed at building leaner, more agile teams in alignment with shifting business objectives. With Kruti’s training nearing completion, Krutrim has determined that a large linguistics team—once reportedly at 600 members—is no longer required.
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Fundraising Goals Trimmed Amid Tepid Investor Sentiment
The restructuring also comes amid reduced fundraising targets. While Krutrim previously aimed to raise $500 million to scale its AI ambitions, the goal was later lowered to $300 million following limited investor traction. The company became a unicorn in 2024 after raising $50 million, marking a high point followed by slowing momentum for its language models and cloud platform.
Industry analysts note that Krutrim’s challenges are reflective of the broader Indian AI ecosystem, which faces stiff competition from established global players and the technical hurdles of product-market fit in local markets. Krutrim’s hybrid approach—using its proprietary Krutrim V2 model alongside open-source and third-party technologies—has yet to deliver breakout adoption.
Operational and Leadership Shifts Raise Concerns
Further complicating matters, Krutrim experienced notable leadership churn in 2024 and early 2025, with multiple senior executives exiting. These internal shifts, combined with delayed scaling and limited traction for Kruti, have led to questions around the company’s strategic direction.
Despite the turbulence, Krutrim remains committed to positioning Kruti as a locally optimized AI solution, focusing on embedding it into India’s everyday digital interactions, especially for non-English-speaking users.
As India’s AI landscape continues to evolve, Krutrim’s trajectory offers insight into the promises and pitfalls of building cutting-edge technology in a competitive, capital-intensive environment.
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