Bhavish Aggarwal-led AI start-up Krutrim has laid off more than 100 employees, primarily from its linguistics division, according to The Economic Times report. This marks the second round of layoffs at Krutrim, which started in June.
It is said that Krutrim’s linguistic had nearly 600 employees before layoffs. The report stated that the job cuts impacted linguists hired for full-time roles across 10 Indian languages, including Telugu, Odia, Marathi, Tamil, and more.
The layoffs come at a time when Krutrim is pitching its AI product ‘Kruti’ as a homegrown rival to OpenAI’s ChatGPT and Google’s Gemini, in an effort to emphasise localisation, multilingual support, and a voice-first approach built for Indian users.
The assistant operates in 13 Indian languages and is optimised for mobile use. Kruti's multimodal capabilities are powered by Krutrim's V2 large language model and open-source models, aiming for scalable and cost-efficient performance tailored for Indian users.
Kruti offers features such as research mode, image generation, and read-aloud responses. These features are available to users at no cost.The assistant also integrates with various apps and services, providing context-aware assistance and reducing the need for users to switch between multiple apps.
It also provides an embeddable software development kit (SDK) that allows integration of its AI capabilities into third-party platforms, including memory management and tool execution.
The report also cited delay in fundraising and lack of product traction as main reasons behind the restructuring. The artificial intelligence platform had become unicorn in 2024 after ssecuring $50 million from Z47 Partners.
It also launched Krutrim AI Labs around the same time, and even announced a ₹2,000 crore investment into AI development. Krutrim founder Bhavish Aggarwal pledged to scale this up to ₹10,000 crore by next year.
Initially, Krutrim planned to raise $500 million, however, the target was slashed to $300 million due to tepid investor interest.
Krutrim’s large language model and cloud offerings, introduced in 2024, have reportedly failed to gain significant traction, as many startups continue to favour the more established solutions from global hyperscalers.
The situation has been compounded by leadership churn, with close to a dozen senior executives leaving in 2024, followed by additional exits in early 2025.
