Krutrim, the AI division of Ola, has laid off around 50 employees from its linguistics team in its third round of job cuts since June, according to sources cited by Economic Times.

Krutrim is developing a large language model named Krutrim 3 and has seen over 200 departures so far, including layoffs and leadership exits.

A company spokesperson said the layoffs are part of a strategic realignment and that a data annotation project involving in-house linguistics has concluded.

Key personnel from the text-to-speech project, including team leaders, were among those let go, leaving the linguistics team significantly reduced.

Since April 2025, more than six senior executives have exited, including directors and heads of engineering, finance, and architecture.

Previous reports indicate these changes come amid funding delays and slow product traction for Krutrim.

🔗 Source: The Economic Times

🧠 Food for thought

1️⃣ AI companies struggle despite industry hype, reflecting broader execution challenges

Krutrim’s layoffs align with a pattern across the AI industry, where ambitious projects often fail to deliver promised returns.

Recent research shows that 95% of enterprise AI pilots yield no measurable return, with execution failures rather than technological limitations being the primary cause 1.

This context helps explain why Krutrim is cutting staff while simultaneously building its largest language model, Krutrim 3. This scenario reflects the gap between AI investment and actual business outcomes.

The broader tech sector has seen over 22,000 job cuts in 2025 alone, with AI-related layoffs specifically numbering over 10,000 in July 23.

Krutrim’s third round of layoffs since June, affecting over 200 employees, mirrors this industry-wide trend of companies reassessing their AI investments amid funding delays and lack of product traction.

2️⃣ Automation creates paradox for AI companies building language technologies

The elimination of Krutrim’s linguistics team while developing a language model illustrates the complex dynamics of AI development, where human expertise becomes both essential and expendable.