The Economic Times recently reported that in a second round of layoffs, Krutrim, the artificial intelligence startup started by Bhavish Aggarwal of Ola, had let go of around 100 workers. A significant portion of the firm’s linguistics staff, which had just recently arrived, was impacted by the layoffs.
The decision was made only a few weeks after more than a dozen positions were eliminated in Krutrim’s initial wave of layoffs in June. The ET further reported that the most recent layoffs were a result of a “strategic realignment” and an effort to create leaner teams in order to better manage resources. The existing round of layoffs started soon after Kruti, the company’s AI helper, was introduced in June.
Why the Linguistics Team Was Hit Hard?
The report went on to say that the company no longer requires as many employees as they once did because nearly 80% of the training has already been completed for the AI helper Kruti. This implies that as the product approaches completion in its early stage, the company’s requirement for linguistics personnel has decreased.
Strategic Realignment: The Real Reason Behind the Cuts
Prior to this, Krutrim had declared significant efforts to develop its AI capabilities. When Bhavish Aggarwal established Krutrim AI Labs earlier this year, he committed INR 2,000 crore to AI development, with ambitions to double that amount to INR 10,000 crore the following year. In 2024, the business became a unicorn after raising $50 million from venture capital firm Z47 Partners.
Tech Layoffs in 2025 Globally
Particularly at a time when many software companies worldwide are cutting budgets and shrinking staff, the layoffs are perceived as a change in emphasis from team expansion to effective capital use.
Even though artificial intelligence is still one of the most talked-about development sectors, many startups and big businesses are having trouble controlling costs while attempting to grow rapidly.In 2025 alone, the tech industry’s current wave of layoffs has resulted in over 100,000 job losses worldwide.
As they prioritise AI integration and adjust to shifting market conditions, major companies like IBM, Intel, and Microsoft continue to reduce their workforces.
AI’s Growing Role in Workforce Reductions
Microsoft, for example, just announced 9,100 layoffs that will impact its Xbox and gaming operations, among other departments. These layoffs serve as a reminder of the continuous difficulties businesses have in the quickly changing tech sector.
Additionally, IBM has been laying off some 8,000 workers, primarily from its human resources division. This comes after an internal shift towards automation, where jobs that were formerly handled by human staff are progressively being replaced by AI systems.
This change demonstrates how AI is increasingly affecting employment positions and the strategic realignments that tech businesses are undergoing. AI integration is changing the nature of work and the skills needed in the tech sector.
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