Conversational AI unicorn Gupshup laid off around 200 employees in a restructuring exercise earlier this month, sources told Inc42.

This was the second such exercise at Gupshup in five months. In December last year, the company fired about 300 employees from across departments. With the latest restructuring, it has laid off nearly 500 employees over the last few months, the sources added.

The layoffs were aimed at improving the bottom line by removing redundancies. The affected employees were primarily from the companies acquired by the unicorn between 2021 and 2022.

Gupshup acquired multiple companies in the conversational AI and customer engagement segment during its expansion spree after it raised $100 Mn in its Series F funding round, led by Tiger Global, in April 2021 at a unicorn valuation.

It acquired five companies – Dotgo, Knowlarity, Active.ai, AskSid, and OneDirect – between September 2021 and June 2022.

Gupshup confirmed the layoffs in a statement sent to Inc42. However, it didn’t disclose the number of employees impacted by the restructuring exercise or details about its financial performance in FY24 and FY25.

“As Gupshup continues to innovate and drive AI-led customer engagement, we are also focusing on efficiency and profitability. We continue to value all our team members and deeply value their contributions to the organisation. These organisational changes, while difficult, demonstrate our ability to drive long-term profitable growth and better position us to drive global market leadership in the conversational AI landscape,” the company said in the statement.

It is unclear if Gupshup plans to shut any of the acquired companies as it didn’t respond to Inc42’s queries on the subject.

Narrating the sequence of events, a former employee said, “We were not given much time or any notification, it was a forceful resignation.”

Meanwhile, multiple sources said that Gupshup might initiate another round of layoffs around June this year, which might result in 100-300 employees losing their jobs. The company didn’t respond to Inc42’s query on future layoff plans.

Gupshup started operations in 2004 as an SMS-based platform but later shifted to helping businesses send messages to customers through WhatsApp, Instagram, and other chat apps. Riding on the GenAI wave, the company has now evolved into a conversational AI platform, building and deploying AI agents for various business functions like marketing, commerce and support.

Backed by investors like Tenaya Capital and Fidelity, Gupshup was last valued at $1.4 Bn in 2021. It has raised a total funding of about $484 Mn to date.

Its cofounder and that Gupshup has received a lot of interest from public market investors. While the company is open to IPO, Sheth said at the time that it was figuring out financial, legal and other issues pertaining to shifting its base to India from the US.

On the financial front, Gupshup claimed that its revenue grew 55% year-on-year to $300 Mn in FY23 and it was looking to double it in FY24. However, it is yet to share its FY24 numbers.

In December last year, when Gupshup undertook the first layoff exercise, its investor Fidelity lowered the estimated worth of its stake in the company by 65% compared to its investment in 2021. The asset management firm valued the company at $486 Mn at the time, a third of what it was valued at its peak.

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