Insurance unicorn Acko has undertaken a round of workforce restructuring, with around 60 employees, or nearly 5% of its total workforce, set to transition out amid its AI push ahead of its potential public listing in FY27.

An Acko spokesperson confirmed the development, which was first reported by Mint.

Sources aware of the matter further said the company considers this a “structural realignment” exercise, stressing that it is not a cost-cutting measure, but a result of greater dependency on AI and automated processes. 

“This is not a cost-cutting exercise. It is a structural realignment where the organisation is resetting the way it operates internally in a new environment centred around AI,” a source said.

Sources added that the affected employees are spread across Acko’s nearly 1,200-member workforce, with no team or function being impacted more than others.

As part of the transition, employees have been given about two-and-a-half months of notice, along with the option of notice pay if preferred. 

Acko is said to be providing 15 days of salary to the affected employees for every year of their  service in the company, as well health insurance coverage for eight months, career transition support, and in some cases, the option to keep their work device to continue their transition. 

According to sources, the restructuring is linked to Acko’s efforts to realign workflows as AI adoption increases across the organisation.

Meanwhile, the insurance company is preparing for a potential IPO in the ongoing fiscal year (FY27). As per reports, Acko is eyeing a public issue of $300 Mn to $400 Mn and is in early discussions with bankers for the same. The proposed issue is expected to include a mix of fresh capital and secondary share sales by existing investors.

On the financial front, Acko reported a net loss of ₹424.4 Cr in FY25, down 57% from ₹669.9 Cr a year earlier.  Operating revenue rose 35% to ₹2,836.8Cr from ₹2,106 Cr during the fiscal. Employee expenses were reduced to ₹334 Cr from ₹354 Cr a year ago, while marketing expenditure declined to ₹496 Cr from ₹562 Cr during the same period. The startup is yet to disclose its performance for FY26.

The development comes amid a broader wave of workforce reductions driven by the rapid rise and adoption of AI across industries, which has largely seen tech giants like Amazon, Microsoft, Oracle and TCS cut down their workforce significantly. 

In the Indian startup ecosystem, we witnessed major restructuring and layoffs at Livspace this year.

In February, home interiors company laid off 1,000 employees, or about 12% of its workforce, as part of its AI push. It said the layoffs were driven by the integration of advanced AI agents and automation across key functions such as sales, operations, design, and marketing.

While AI is expected to improve efficiency and boost productivity, concerns around job losses continue to grow globally. The Economic Survey 2025-26 noted that although AI can drive significant productivity gains and economic growth, it also creates a serious risk of labour displacement, especially in India’s service-heavy IT and BPO sectors.

 

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