Chaos at Saarthi.ai: Mass layoffs, unpaid salaries, and CEO's passport theft

Deeptech startup Saarthi.ai has been going through troubles over the past year as it failed to pay long due salaries of past and current employees. At the same time, the firm also reduced its workforce by more than 70%.

As per Entrackr sources, Saarthi.ai reduced its workforce to 40 from 140 since March 2023 and most of these employees are waiting for their salary. Moreover, the firm has not remitted the tax deducted at source (TDS) to the government for the last two fiscal years.

In July 2023, a PTI report highlighted the layoffs at the company and long pending dues of the employees without divulging much details. Saarthi.ai’s chief executive Vishwa Nath Jha also said that pending salaries will be cleared in three months.

“The firm has been holding salaries of more than 50 employees for over a year now and even didn’t reply to legal notices. ​​The founder has been unresponsive and even mentioned that he doesn't owe us any explanation on multiple occasions,” said a former employee requesting anonymity.

Entrackr talked to about a dozen employees who were associated with Saarthi.ai and are yet to receive their pending salaries.

Responding to Entrackr’s queries, Jha confirmed that Saarthi.ai reduced its workforce to 40 due to pressure from investors. However, he claims that these layoffs were carried out before September last year.

Jha also admitted that Saarthi.ai didn’t deposit TDS on behalf of employees for the last two fiscal years.

“The startup is still not generating surplus cash to clear long-standing dues. We have been transparent in our communications with the concerned ex-team members. We are working hard to become operationally cash flow positive by Q2 of 2024 to sustain company operations and support our current team members. Additionally, Saarthi.ai is actively in talks with investors to raise fresh capital to address outstanding debts and liabilities,” said Jha.

Launched by Jha, Sameer Sinhaa, and Sangram Sabat in 2017, Saarthi.ai specializes in conversational AI for low resource and global languages for Indic, South Asian, Arabic, and European users. The Bangalore-based startup was funded by Kunal Shah’s QED Innovation Labs, Capri Global Capital, Lead Angels Network, among others. Notably, the firm is facing a crunch at a time when AI startups saw an upsurge in funding.

A former employee of the company added that the firm is still operational with paying clients and has been clearing its loans to banks but not prioritizing the dues of employees. Sharing screenshots, the person added that Saarthi.ai has also been looking for new hirings as he got messages from freshers for referrals at the company.

Commenting on allegations of deliberately delaying salaries, Jha said that these claims are untrue and seems to be a plot to defame and harm Saarthi. “We’re planning to fill key positions as it negotiates deals [business] with several banks and NBFCs,” he added.

Jha also claimed that a former senior employee stole his passport with a US visa, attempting to prevent him from traveling to the country to raise fresh capital. 

“While I managed to reissue a new  passport, I am yet to get the US visa again. It’s a long queue,” said Jha.