Yellow.ai Lays Off over 100 Staff as It Shifts Deeper into AI Automation

Bengaluru-based conversational AI startup Yellow.ai has laid off more than 100 employees over the past few weeks, affecting nearly 30% of its workforce, as it accelerates its move toward higher levels of AI automation.

The layoffs were carried out in phases and mainly impacted engineering and product teams. The company has also postponed or cancelled salary hikes and appraisals over the last two years, Inc42 reported. This is the second round of job cuts at Yellow.ai in 2025, as it let go of around 40-50 employees in August.

Confirming the development, a Yellow.ai spokesperson told Inc42 that the company is transitioning from conversational AI to agentic AI, systems that can operate more autonomously with minimal human intervention.

“Like many technology companies, we’ve made difficult but necessary workforce adjustments as part of our transition to an agentic AI platform,” the spokesperson said.

The company reportedly added that the shift has changed how customers use its products and how they are built and supported, resulting in fewer people being needed for implementation and support. As part of this change, Yellow.ai has realigned its teams to focus on specialised skills for agentic AI, while reducing roles linked to older operating models.

The layoffs mark a sharp contrast to Yellow.ai’s expansion plans in 2022, when it announced growth across markets such as Australia, Japan, Africa, Europe, the US, and the UK, while strengthening its presence in India and other regions.

At that time, the startup had over 900 employees globally and rolled out an ESOP programme worth $43 million.

Founded as a conversational AI company, Yellow.ai serves more than 1,100 enterprises across 85 countries. It supports 35 text and voice channels in 135 languages and claims to automate over 16 billion conversations each year.

The startup has raised more than $102 million from investors including WestBridge Capital, Lightspeed Venture Partners, and Salesforce Ventures.

Notably, in 2023, Yellow.ai developed YellowG, its proprietary enterprise-focused AI model designed to automate customer interactions. YellowG powers chatbots, voice assistants, and customer service tools used in sectors such as banking, e-commerce, and telecom, highlighting the company’s early push toward automation, an approach that is now reshaping its workforce as well.