In a major development that has sent ripples across India’s startup ecosystem, KKR-backed home interiors unicorn Livspace has laid off at least 1,000 employees—nearly 12 percent of its total workforce—as part of a sweeping operational overhaul centered on artificial intelligence (AI). Simultaneously, co-founder Saurabh Jain has exited the company after more than a decade at the helm, marking the end of a significant chapter in the company’s journey.

The twin developments—mass layoffs and a leadership transition—come at a time when global leaders and CEOs are in India for the India AI Impact Summit 2026 in Delhi, discussing how artificial intelligence will reshape industries without necessarily leading to job losses. Against that backdrop, Livspace’s decision to trim its workforce while doubling down on AI adoption has sparked debate across the startup and tech communities.

Livspace Fires 1,000 Employees in AI-Driven Restructuring

According to people familiar with the matter, the Bengaluru-based company has reduced its headcount by around 1,000 employees as part of a cost-optimization and AI-integration exercise. Before the layoffs, Livspace reportedly employed between 7,000 and 8,000 people.

The job cuts have affected employees across key departments, including:

• Design

• Sales

• Operations

• Marketing

• Other core functions

The move marks at least the second significant round of layoffs at Livspace in recent years. In 2023, the company cut nearly 100 jobs to improve its profitability profile. Earlier, in 2020, it let go of more than 400 employees. With the latest reduction, the total workforce impact over the years has been substantial.

Company Confirms AI-Focused Reorganization

A Livspace spokesperson confirmed the restructuring, emphasizing that the layoffs are part of a broader strategic shift rather than reactive cost-cutting.

“At Livspace, we’ve always been a technology-first company. As we look at the next phase of our growth, we are fundamentally reorganizing our internal operations to become an AI-native agentic organization,” the spokesperson said.

Clarifying the intent behind the move, the spokesperson added:

“To be clear, this isn't a reactive cost-cut. It’s a strategic reallocation of resources.”

According to the company, Livspace is investing heavily in AI to optimize its operations and streamline workflows. The integration includes advanced AI agents and automation across its core verticals—Sales, Operations, Design, and Marketing.

In practical terms, this means that tasks previously handled manually are now being executed by intelligent systems. While the company claims that existing teams are seeing their productivity “supercharged,” the transition has simultaneously reduced the need for certain roles.

AI Replaces Manual Work as Livspace Rebuilds Operations

The restructuring underscores a broader trend within tech-driven startups: replacing manual, repetitive processes with automated and AI-powered systems. Livspace says it has embedded advanced AI agents into its workflows, enabling:

• Automated customer interactions in sales

• AI-assisted design recommendations

• Streamlined operational processes

• Marketing automation and data-driven insights

This AI-first approach is being framed internally as a transformation toward becoming an “AI-native agentic organization,” signaling a structural shift rather than incremental adoption of tools.

However, the timing of the layoffs is particularly striking. As policymakers and industry leaders discuss the future of work at the India AI Impact Summit 2026 in Delhi—arguing that AI will augment rather than eliminate jobs—Livspace’s workforce reduction tells a more complex story about automation and employment in practice.

Financial Performance: Improved Revenue, Reduced Losses

The cost-cutting measures appear to have supported the company’s financial turnaround efforts. Livspace has reported improved financial metrics in recent years.

• FY25 Revenue: ₹1,460 crore

• FY24 Revenue: ₹1,185 crore

• Growth: 23 percent year-on-year

Losses have also narrowed significantly:

• FY24 Loss: ₹416 crore

• FY25 Loss: ₹242 crore

The improvements suggest that operational efficiencies and tighter cost controls have helped strengthen Livspace’s financial position, even as it navigates a competitive market and evolving technological landscape.

Co-founder Saurabh Jain Steps Down After 11 Years

Amid the workforce realignment, Livspace also witnessed a major leadership change. Co-founder Saurabh Jain has stepped down after nearly 11 years with the company.

Jain, who had been elevated to Chief Business Officer (CBO) in 2022, joined Livspace in 2015 after his company DezignUp was acquired by the startup. A B.Tech graduate from the Indian Institute of Technology (IIT) Delhi, he played a key role in shaping the company’s growth trajectory.

In a LinkedIn post announcing his departure, Jain wrote:

“After more than a decade building Livspace, I’m stepping into my next chapter with pride in what we’ve created and clarity about what lies ahead.”

Reflecting on his journey, he added:

“I started with a simple belief — home interiors in India could be built differently. What followed was a journey of conviction, resilience, hard calls, and extraordinary people. From early uncertainty to building a category-defining company, this experience has shaped me in ways I’ll carry forever.”

He expressed gratitude toward the Livspace ecosystem:

“I’m deeply grateful to the teams, partners, board members, and homeowners who trusted us and built this alongside me. What stands today is a reflection of collective grit and shared ambition. I will always cheer for Livspace and remain deeply optimistic about its future. As we say, I will always remain a proud Spacer, forever! Ramakant Sharma and Anuj S.”

Why Did Saurabh Jain Quit?

While Jain did not specify the exact reason behind his departure, he hinted at future entrepreneurial plans:

“As I take a brief pause to reflect, I’m also working on something new — a space I’ve been thinking about deeply. I’ll share more soon. Sometimes you have to close a meaningful chapter — not because the story ends, but because a bigger one is ready to begin.”

His exit coincides with the company’s strategic and technological transformation, though no direct link has been officially established between the restructuring and his resignation.

Livspace’s Official Statement on Jain’s Exit

Livspace also issued a formal statement acknowledging Jain’s contributions:

“After 11 remarkable years, Saurabh Jain, Co-founder of Livspace, has decided to move on to embark on his next entrepreneurial chapter. Saurabh has been a cornerstone of this organization since its earliest days. Joining us when we were just a vision, he was instrumental in architecting the scale and success Livspace enjoys today.”

The statement continued:

“His journey with us has been defined by relentless dedication and a builder’s mindset — qualities that helped transform a startup into a market leader. Saurabh’s legacy is woven into the very fabric of this company. As he moves on to build his next big thing, we carry his vision forward with gratitude and excitement. We can’t wait to see what he creates next. We thank him for everything and wish him the very best!”

Social Media Reacts to Jain’s Departure

Jain’s announcement triggered an outpouring of support on social media.

Founder Vaishali Sampath wrote:

“Building structure in an unorganised industry takes real conviction. What you’ve built has shaped the ecosystem meaningfully. Wishing you continued impact and success in whatever you build next.”

Ashish Shah, CEO of Pepperfry.com, commented:

“Best Wishes Saurabh Jain for what lies ahead. Great work building a category defining business at Livspace. I am sure you are onto building another big one! Meet soon.”

Others echoed similar sentiments, with messages such as:

• “Best time to build anew!”

• “Congratulations on an incredible journey, it's truly inspiring. Best wishes as you step into this next chapter.”

The reactions reflect Jain’s strong standing within India’s startup and home décor ecosystem.

Livspace: India’s Largest Home Interiors Startup

Founded in 2014 by Ramakant Sharma, Anuj Srivastava, and Shagufta Anurag, Livspace has grown into the largest player in India’s home decor and interior design market. The company competes with Peak XV-backed HomeLane and other organized players in the space.

Since inception, Livspace has raised over $500 million in funding and was last valued at over $1 billion, earning it unicorn status. Backed by global investors including KKR, the company has positioned itself as a technology-enabled platform transforming how Indian homeowners design and furnish their living spaces.

A Defining Moment for Livspace

The combination of large-scale layoffs and a co-founder’s exit marks a defining moment for Livspace. On one hand, the company is demonstrating financial discipline, improved revenue growth, and narrowing losses. On the other, it is undergoing a deep technological and organizational transformation that has tangible human costs.

As Livspace pivots toward becoming an AI-native organization, its evolution may offer a case study for Indian startups grappling with automation, efficiency pressures, and the future of work.

Whether this strategic reallocation of resources positions the company for sustainable, profitable growth—or intensifies scrutiny around AI-driven workforce reductions—remains to be seen. What is clear, however, is that Livspace is entering a new chapter—leaner, more automated, and reshaped by both technological ambition and leadership transition.

With inputs from agencies

Image Source: Multiple agencies

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