Livspace cuts workforce by 1,000 employees amid AI pivot and co-founder exit

Home interiors unicorn Livspace has laid off approximately 1,000 employees, accounting for nearly 12% of its total workforce, according to a report by Moneycontrol. The move comes as the company attempts to transition into an "AI-native" organisation while navigating a challenging funding environment.

Shift to AI

According to the report, Livspace characterised the workforce reduction not as a reactive cost-cutting measure, but as a "strategic reallocation of resources." The company said it has spent the last six months integrating advanced AI agents and automation across core functions including sales, design, operations, and marketing. By deploying these AI systems to handle tasks previously performed manually, the firm aims to streamline its service delivery model.

Leadership transition

The restructuring coincides with the departure of a key leadership figure. The report also added that co-founder Saurabh Jain is stepping down from the company after 11 years to pursue personal interests.

Financial context and funding

While the company highlights its AI shift, the layoffs also appear to be influenced by broader financial pressures. Despite narrowing its losses by 42% in FY25 (reporting a revenue of ₹1,460 crore), Livspace has not raised external funding for nearly four years. This prolonged "funding winter" and the ongoing pursuit of a clear path to profitability likely served as catalysts for the massive downsizing.

This is not the first time the KKR-backed unicorn has reduced its headcount. Livspace previously laid off 450 employees during the 2020 pandemic lockdowns and cut another 2% of its workforce in March 2023

Founded in 2014, Livspace currently operates across India, Southeast Asia, and the Middle East, and has raised over $450 million to date from investors like KKR, Jungle Ventures, and Venturi Partners.