Livspace lays off 1,000 employees as part of a major internal restructuring aimed at transforming the company into an AI-native organisation. The workforce reduction, which impacts nearly 12% of its total staff, comes alongside leadership changes, funding challenges, and a broader shift toward automation.

The move highlights how artificial intelligence is reshaping business operations while also reflecting financial and strategic pressures within the company.

Livspace Lays Off 1,000 Employees in AI-Led Restructuring

Livspace confirmed that it has laid off around 1,000 employees as part of a phased reorganisation focused on integrating artificial intelligence across its operations. According to the company, the workforce reduction is a strategic reallocation of resources rather than a reactive cost-cutting measure.

The firm stated that it has deployed advanced AI agents to automate several tasks previously handled manually, including roles across sales, design, operations, and marketing. The transition unfolded gradually over the past six months, during which the company tested and implemented AI systems while maintaining service quality.

However, a report by Moneycontrol suggested the scale of layoffs could be significantly higher, estimating that up to 25% of employees may have been affected.

AI Integration and Automation Across Core Functions

The company’s shift toward becoming an AI-native organisation is central to its restructuring strategy. Livspace said automation and artificial intelligence are being deeply embedded into its workflows to improve efficiency and streamline operations.

By deploying AI-driven systems across multiple departments, the company has been able to phase out several roles that were previously performed manually. The move reflects a broader trend among technology-driven firms adopting AI to enhance productivity and reduce operational complexity.

Livspace emphasised that the transformation was implemented carefully to ensure customer experience and service standards were not disrupted during the transition.

Leadership Change and Financial Pressures

The announcement that Livspace lays off 1,000 employees also coincides with a leadership transition. Co-founder Saurabh Jain has stepped down after 11 years with the company to pursue personal interests.

Founded in 2014, Livspace has raised more than $450 million in funding from investors including KKR, Jungle Ventures, and Venturi Partners. The company achieved unicorn status in 2022 following a $180 million funding round led by KKR.

For the fiscal year ending March 2025, Livspace reported revenue of ₹1,460 crore while reducing its losses by 42%. Despite these improvements, the company has faced limited external funding over the past four years and continues to navigate challenges related to long-term profitability.

Layoffs Reflect Broader Business Challenges

While Livspace positions the layoffs as part of its AI transformation strategy, the decision appears influenced by additional factors. The company’s prolonged funding gap and lack of a clear roadmap to profitability are seen as key drivers behind the workforce reduction.

Livspace has previously carried out job cuts, including a 2% workforce reduction in March 2023 and the layoff of around 450 employees during the COVID-19 pandemic in May 2020.

The latest development underscores how companies balancing technological transformation with financial sustainability are increasingly reshaping their workforce structures.

Global Operations and Market Presence

Livspace operates across multiple markets, including India, Southeast Asia, and the Middle East. The company continues to expand its presence while restructuring its internal processes to align with automation-driven growth.

As Livspace lays off 1,000 employees and accelerates its AI adoption strategy, the move signals a significant shift in how the company plans to manage operations, resources, and future growth.