Livspace Lays Off 1,000 Employees and Co-Founder Exits: What It Means for the Interior Design Industry

Livspace, one of India's largest home interiors and renovation platforms, has laid off approximately 1,000 employees — nearly 12% of its total workforce. The layoffs, which were rolled out over the past six months, coincide with the departure of co-founder Saurabh Jain after 11 years with the company.

For architects, interior designers, and firms operating in this space, this is a significant development worth paying attention to.

Here's what happened and what it signals for the broader industry.

What Happened at Livspace?

The Bengaluru-based unicorn, backed by global investors including KKR, announced a major internal reorganisation aimed at transforming the company into what it calls an "AI-native agentic organisation." The company says it is integrating advanced AI agents and automation across core functions including sales, operations, design, and marketing.

While Livspace officially states 12% of employees were affected, reports from Moneycontrol suggest the actual figure could be as high as 25%. Roles across multiple departments — design, sales, operations, and marketing — have been phased out as AI systems take over responsibilities previously handled by humans.

Simultaneously, co-founder Saurabh Jain has stepped down. Jain originally joined Livspace in 2015 after his startup DezignUp was acquired, and was later promoted to Chief Business Officer in 2022. In a LinkedIn post, Jain said he's stepping into his "next chapter" and hinted at working on something new.

The Financial Picture Behind the Layoffs

While Livspace frames this as a strategic AI pivot, the financial context tells a more nuanced story. The company hasn't raised significant external funding in nearly four years. Despite improving metrics — revenue rose 23% to ₹1,460 crore in FY25, and losses narrowed 42% to ₹242 crore — the company still hasn't achieved profitability.

Founded in 2014, Livspace has raised over $450 million from investors and achieved unicorn status in 2022 after a $180 million round led by KKR. But with accumulated losses running into thousands of crores and no fresh funding on the horizon, the pressure to cut costs is evident regardless of the AI narrative.

AI Washing or Genuine Transformation?

This is where the story gets interesting. Livspace claims AI-powered tools are now handling mood boarding, 3D visualisation, lead scoring, and supply chain management. The company says these tools have significantly reduced concept-to-visualisation time and dependency on manual operations.

However, many industry observers remain sceptical. OpenAI founder Sam Altman, who was in India this week for the India AI Impact Summit 2026, acknowledged a growing trend of companies using AI as a cover for routine cost-cutting. The timing of Livspace's move — amid a prolonged funding drought — lends weight to this perspective.

The reality is likely somewhere in between. AI is genuinely changing how design and operations work in the interiors space, but it's also a convenient narrative when you need to reduce headcount by 1,000 people.

What This Means for Architects and Interior Designers

If you're an architect or interior designer running your own practice, there are a few important takeaways from Livspace's restructuring:

The organised interiors market is consolidating. Even a unicorn like Livspace is struggling with profitability. This puts more pressure on platform-based models and could actually benefit independent designers who operate lean, relationship-driven practices.

AI is reshaping design workflows. Whether or not Livspace's claims are exaggerated, the direction is clear. Tools for 3D visualisation, mood boarding, and project management are becoming AI-powered. Designers who adopt these tools early will have a competitive advantage.

Digital presence matters more than ever. With platforms like Livspace cutting their sales and marketing teams, there's less aggressive outbound from aggregators. This creates an opening for individual firms to capture organic search traffic and build direct client relationships. Investing in your Google Business Profile, website SEO, and content marketing is now a real competitive moat.

The human touch remains irreplaceable. Critics of Livspace's AI push rightly point out that AI can render a 3D room in seconds but cannot replicate the nuanced empathy required when a homeowner is making the biggest emotional and financial investment of their life. This is where independent architects and designers have always had the edge.

The Bigger Picture

Livspace's story is part of a larger pattern playing out across India's startup ecosystem. Companies that scaled aggressively during the cheap-capital era are now being forced to find sustainable business models. The home interiors market in India remains massive and largely unorganised — which means there's room for both tech-enabled platforms and traditional design firms to thrive.

The question for Livspace is whether replacing 1,000 human roles with AI agents will maintain the quality of service that homeowners expect. If they succeed, it sets a new blueprint for the industry. If they don't, it becomes a cautionary tale of over-automation.

For architects and interior designers reading this: the takeaway isn't to fear AI or platform disruption. It's to double down on what makes your practice unique — personal relationships, design expertise, local market knowledge, and a strong digital presence that brings clients directly to your door.

How MileDeep Labs Can Help

At MileDeep Labs, we specialise in helping architects and interior designers build a powerful digital presence through SEO optimization, Google Business Profile management, and content marketing. In times like these, when large platforms are cutting back on their marketing teams, having a strong organic presence is your biggest asset. Reach out to us to learn how we can help your firm stand out and attract the right clients.