Quick Take
- Krutrim laid off 20 to 25 staff in a second 2026 round, halving its team.
- Product and engineering teams took the hardest hit, and top leaders exited too.
- The AI firm now bets fully on cloud after posting Rs 300 Cr revenue in FY26.
In This Article
Krutrim cuts 25 jobs in a second round of layoffs this year, letting go of nearly half its remaining engineering and product staff over the past few days, per an Economic Times report on July 28, 2026.
The AI startup, founded by Ola chief Bhavish Aggarwal, had an estimated 40 to 50 people before this exercise. The latest cuts follow a sharp strategic reset. Krutrim has walked away from its full-stack AI dream of building large language models and semiconductor chips, and now runs a leaner cloud services business instead.
StartupFeed Insight
The number that tells the real story is not the headcount, it is the revenue mix. Around 90% of Krutrim’s revenue came from Ola Group firms, ET reported, leaving only 10% from outside clients. A profitable company does not usually halve its engineering team, so these cuts signal that Krutrim is being reshaped into a captive cloud vendor for the Ola ecosystem, not an open-market AI leader. Founders and enterprise buyers watching sovereign AI should track this closely. Expect Krutrim to announce a fresh external-client or funding milestone before March 2027 to counter the captive-vendor label. By Harshvardhan Jain.
Krutrim Cuts 25 Jobs: The Breakdown
Krutrim cuts 25 jobs primarily from its product and engineering teams, marking the company’s steepest single reduction relative to its size. The move affected nearly half of an estimated 40 to 50 remaining employees, according to an Economic Times report. Senior leadership exits across AI research, engineering, design, and semiconductor teams preceded this round.
| Metric | Detail | Notes |
|---|---|---|
| Latest cut | 20 to 25 employees | Past few days, ET |
| Teams hit | Product and engineering | Plus senior exits |
| Team before cut | 40 to 50 employees | ET estimate |
| Peak headcount | 550-plus (Aug 2025) | Fell to 150-160 by March 2026 |
| FY26 revenue | Rs 300 Cr | Nearly 3x prior year |
The most striking detail is the scale of the collapse. Krutrim’s workforce shrank from more than 550 people in August 2025 to roughly 150 to 160 by March 2026, and now sits far lower.
About Krutrim
Krutrim is a Bengaluru-based artificial intelligence company launched in April 2023 by Bhavish Aggarwal and Krishnamurthy Venugopala Tenneti. It became India’s first AI unicorn in 2024. After abandoning chip design and its own language models, it now sells full-stack AI cloud services to enterprises across mobility, fintech, and manufacturing, backed by Matrix Partners India.
Why is Krutrim cutting jobs again?
Krutrim is cutting jobs because it has narrowed its focus from a broad AI ecosystem to a single cloud services business. The reset began in late 2025, when the company paused chip development and moved capital and engineers toward its cloud platform. That pivot made teams built for language and chip work non-core.
“It is massive. They have left only one person in many teams,” one affected employee told the Economic Times, describing the depth of the latest cuts.
Krutrim did not wish to comment on the specifics referenced in ET’s queries. The company said it is running further downsizing to automate a significant portion of internal operations. For some former staff, that explanation offers little comfort as they wait on dues.
Are ex-staff facing payout delays?
Several former Krutrim employees alleged delays in receiving full and final settlements, ET reported. Some said they have waited more than four months for pending salary and leave encashment. Others flagged unpaid work-related reimbursements for travel, hotel stays, and out-of-pocket costs.
One former employee said the company had promised to clear the entire amount at once, but instead began releasing payments in multiple instalments. Another said an out-of-pocket expenses claim from an earlier work trip, submitted in May 2026, remained pending for nearly three times the previous year’s usual reporting period, still tied to Ola cloud services. StartupFeed.in could not independently verify these individual claims.
How does Krutrim compare to rivals?
Krutrim now competes in India’s crowded AI cloud market rather than the frontier model race it once targeted. Its FY26 revenue of Rs 300 Cr looks healthy, but the revenue source raises questions. With about 90% of income from Ola Group firms per ET, its true open-market scale trails independent cloud players.
| Company | Core Focus | Backing |
|---|---|---|
| Krutrim | AI cloud services | Matrix, Bhavish Aggarwal |
| Sarvam AI | Sovereign LLMs | Lightspeed, Peak XV |
| E2E Networks | GPU cloud compute | Listed, public markets |
What sets Krutrim apart is its Ola link, which is both its biggest customer and its biggest question mark on independence.
What’s Next
Krutrim says it will keep automating internal operations, which points to more restructuring ahead. The real test arrives with its next revenue disclosure, likely around mid-2026 filings, where the split between Ola Group income and external clients will show whether the cloud bet truly scales. Will a leaner Krutrim win outside customers, or stay a captive Ola vendor?
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