Conversational AI unicorn Gupshup has reportedly laid off around 200 employees earlier this month as part of a broader restructuring exercise, according to sources familiar with the matter. This marks the second round of layoffs in less than five months. Back in December 2024, the company had terminated around 300 employees, bringing the total number of layoffs to nearly 500 employees over the past few months.

This wave of job cuts is said to be focused on streamlining operations and enhancing profitability, primarily by eliminating redundancies within the organization. Sources indicated that many of the affected employees were from startups acquired by Gupshup between 2021 and 2022 during its aggressive expansion phase. However, the company has denied that the layoffs were concentrated among the acquired entities.

Acquisition Spree and Shift Towards AI-Led Services

Gupshup’s recent restructuring effortscome after a series of acquisitions it made following its Series F funding round in April 2021, which saw the company raise $100 million led by Tiger Global. This round propelled Gupshup to unicorn status, with a valuation of $1.4 billion

Between September 2021 and June 2022, Gupshup acquired five companies:

• Dotgo
• Knowlarity
• Active.ai
• AskSid
• OneDirect

These acquisitions helped Gupshup expand its footprint in the conversational AI and customer engagement space, positioning itself as a key player in the evolving AI-driven communications market.

Initially launched in 2004 as an SMS-based platform, Gupshup has transformed over the years into a comprehensive messaging and conversational AI platform, enabling businesses to engage with customers through platforms like WhatsApp, Instagram, and other chat applications. More recently, the company has been capitalizing on the generative AI (GenAI) trend, building AI agents for use cases across marketing, commerce, and customer support.

Gupshup Responds to Layoff Concerns

In a statement shared with the media sources, Gupshup confirmed that organizational changes were underway, but did not specify the exact number of employees affected or disclose its financial performance in FY24 or FY25. The company emphasized its commitment to innovation, efficiency, and long-term profitability.

“As Gupshup continues to innovate and drive AI-led customer engagement, we are also focusing on efficiency and profitability. We deeply value our team members and their contributions. These organizational changes, while difficult, are aimed at long-term growth and global market leadership,” the company said in a formal statement.

A follow-up statement from the company mentioned that the net headcount reduction over the past 18 months stands at 300, indicating that not all layoffs were from the most recent restructuring.

Despite the company’s statements, some former employees have voiced dissatisfaction, claiming they were forced to resign without adequate notice or explanation.

Speculations Around Further Layoffs and Future Outlook

Multiple insiders have hinted at a possible third round of layoffs that could occur as early as June 2025, potentially affecting another 100 to 300 employees. Gupshup has firmly denied these rumors, stating it is a profitable company with no plans for future layoffs.

In terms of financials, Gupshup previously claimed a 55% year-on-year revenue growth, reaching $300 million in FY23, with hopes of doubling this in FY24. However, the company has yet to release its FY24 performance data.

Adding to the pressure, investor Fidelity slashed the valuation of its stake in Gupshup by 65% in December 2024, valuing the company at around $486 million — a significant drop from its peak unicorn valuation.

IPO Ambitions and Strategic Realignment

CEO and cofounder Beerud Sheth stated earlier this year that the company has attracted attention from public market investors and is exploring an IPO. However, Gupshup is currently resolving financial, legal, and operational issues tied to a potential relocation of its base from the US to India, a move that could align with its broader growth and restructuring strategy.

As Gupshup navigates this challenging period, its success will likely depend on managing employee morale, improving operational efficiency, and delivering on its AI-led growth promises — all while balancing investor expectations and preparing for a possible public listing in the future.