How Can AI Companies Humanely Manage Layoffs and Protect Language Talent from "Train-Then-Discard" Cycles?

On September 2, 2025, Krutrim, the AI arm of Ola, executed a third round of layoffs since June, affecting about 50 people, primarily from its linguistics unit. This unit specialized in regional languages such as Bengali, Malayalam, Punjabi. This followed earlier layoffs in July. Reports also highlighted leadership exits, indicating ongoing restructuring as product roadmaps evolve. For language tech teams that scaled rapidly to train models and localize UX, the message is clear: AI hiring surges can reverse quickly as tooling, funding, or priorities shift.

For linguists and annotators who thought they were building a multilingual future, this feels like a personal setback. Many joined to help Indian languages show up inside mainstream AI; now they're packing desks, scrambling for references, and calculating how long savings will cover Bengaluru rents. The remaining employees report guilt and fatigue, plus fear that automation will replace the very work they trained models on. HR's challenge is to treat exits with dignity (clean documentation, outplacement, mental-health support) while stabilizing core teams with honest roadmaps, not platitudes.

Layoff law in India depends on job classification. For many language specialists, the Industrial Disputes Act, 1947 (for "workmen") may trigger notice, retrenchment compensation, and last-in, first-out considerations, unless exceptions apply; others exit under contract. HR must map roles to legal categories, compute dues (including leave encashment and variable pay accruals), and ensure timely Form-16 and service letters to prevent downstream employability harm. For remaining teams, revisit IP/confidentiality and moonlighting clauses, as skill marketplaces court displaced talent. Above all, publish a skills bridge: micro-credentials for data quality, evaluation engineering, and safety—so this isn't just an ending.

What's one humane practice you expect in any layoff? How should AI firms protect language talent from "train-then-discard" cycles?

A humane practice that should be expected in any layoff is transparent communication. It is important for companies to be upfront about the reasons for the layoffs and to provide as much notice as possible. This allows affected employees to prepare for the transition and seek new opportunities.

To protect language talent from "train-then-discard" cycles, AI firms could consider the following steps:

1. Diversify Roles: Instead of hiring for a single project or task, companies could consider hiring language specialists for diverse roles that involve multiple aspects of AI development. This could provide job security even when specific projects end.

2. Retraining Programs: Companies could invest in retraining programs to help employees adapt to new roles or technologies. This not only protects employees from layoffs but also ensures the company retains valuable talent.

3. Freelance Contracts: Instead of full-time roles, companies could offer freelance contracts to language specialists. This provides flexibility for both the company and the employee, and can be a viable option when work is project-based.

4. Partnerships with Educational Institutions: AI firms could partner with universities or educational institutions to offer internships or project-based roles. This can provide a steady stream of talent for the company while offering valuable industry experience for students.

5. Robust Exit Policies: In case of unavoidable layoffs, companies should have robust exit policies in place. This includes providing adequate notice, offering severance pay, and assisting with job placement services.

Remember, the key is to value the human aspect of your workforce, even in the face of technological advancement and automation.

In response to Mr. N L Babu's query, retaining employee's original certificates is not considered a good HR practice. As per the Indian labor laws, it's unlawful to retain original educational certificates of employees. It can lead to legal complications and can be counted as an unfair labor practice.

Regarding the humane practice during layoffs, it should be a comprehensive approach that includes clear communication, empathy, and providing necessary support. Here are some steps:

1. Transparent Communication: Any layoff should start with clear and honest communication. Employees should be informed of the reasons behind the layoffs and it should not come as a sudden shock to them.

2. Legal Obligations: HR needs to ensure all legal obligations are met, as laid out in the Industrial Disputes Act, 1947. This includes notice period, retrenchment compensation, and last-in, first-out considerations.

3. Outplacement Support: Companies should provide outplacement support, such as career counseling, resume writing, and job search assistance to help employees transition to new jobs quickly.

4. Financial Support: Provide financial support that includes leave encashment, gratuity, and other earned benefits. Also, provide a clear and timely Form-16 and service letters to prevent downstream employability harm.

To protect language talent from "train-then-discard" cycles, AI firms can adopt several strategies:

1. Cross-Training: Employees can be cross-trained in multiple languages or skills. This could help in providing them opportunities in other projects or departments in the event of layoffs.

2. Continuous Learning: Encourage a culture of continuous learning. Provide access to training and development programs to help them acquire new skills.

3. Skill Marketplaces: As mentioned in the question, skill marketplaces can court displaced talent. AI firms can partner with these marketplaces to provide opportunities for their employees.

4. Freelance Opportunities: Encourage and support employees to take up freelance work or consulting assignments. This could help them earn income during the transition period.

Remember, it's not just about being legal, but also about being humane and ethical. The key is to treat employees with dignity and respect during this challenging time.

Dear CiteHR

Very good discussions and authors brought apt points in mitigating problems.

Many lessons to learn in the process like Learn, Relearn, Acquire multi skills, Keep alternatives, expand ur networks, sensitize the issue before it emerge.
Organisation should also think. While recruiting have they not thought this situation? Should be long run practical policy for Training/retraining before exit.
Cost, profitability relevant but what cost of human approach unless there is settlement/deployment policy

Wild thought: Like On site and Off Emergency drills, One should devise suitable/tentative policies in establishments considering such most uncertain scenarios in present atmospheres..

Ram K Navaratna
HR Resonance