Livspace Cuts 1,000 Jobs as Home Interior Startup Restructures Operations

Home interior marketplace Livspace terminated 1,000 employees on February 20, 2026, representing 12% of its total workforce. The Singapore-based company, which operates across India and Southeast Asia, announced the workforce reduction as part of a broader restructuring effort to achieve profitability amid challenging market conditions in the home improvement sector.

The layoffs coincided with the departure of a co-founder, according to industry sources, signaling significant internal changes at the once-promising unicorn startup. Livspace had previously raised over $180 million in funding and was valued at approximately $500 million during its last major funding round.

Context of the Decision

The Livspace layoffs reflect mounting pressure on the home interiors marketplace to streamline operations after years of aggressive expansion. The company had rapidly scaled its workforce during the pandemic-era home improvement boom, when consumers invested heavily in residential upgrades while working remotely.

However, the normalization of consumer spending patterns and rising interest rates have significantly dampened demand for discretionary home improvement services. Livspace's decision to reduce its workforce by 12% indicates the company is prioritizing cost reduction over growth as it works toward sustainable operations.

The restructuring comes as the company faces increased competition from both traditional interior design firms and emerging digital platforms. Industry analysts suggest Livspace expanded too quickly during the pandemic without establishing sufficient revenue streams to support its enlarged workforce.

Impact on Operations

The workforce reduction primarily affected Livspace's technology, marketing, and operations teams across its key markets in India, Singapore, and Malaysia. Sources indicate the company eliminated redundant roles created during its rapid scaling phase, particularly in customer acquisition and business development functions.

Livspace's design consultation services and manufacturing partnerships remain largely intact, suggesting the company is focusing on maintaining core customer-facing operations while reducing back-office support functions. The layoffs are expected to generate approximately $40 million in annual cost savings for the company.

Regional offices in Mumbai, Bangalore, and Gurgaon experienced the most significant reductions, while the company's Singapore headquarters retained most positions. Manufacturing partnerships with furniture suppliers in India and Southeast Asia continue operating normally.

Company Financial Background

Livspace raised $180 million in Series D funding in 2021, achieving unicorn status with a valuation exceeding $500 million. The company's investors include Goldman Sachs, KKR, and Ingka Group, IKEA's investment arm. However, the startup has struggled to achieve profitability despite strong revenue growth in previous years.

The home interiors marketplace reported revenue of approximately $200 million in 2025, representing 15% growth from the previous year. However, this growth rate significantly lagged the company's earlier projections of 40-50% annual increases during the pandemic period.

Livspace's business model combines technology-enabled design consultations with manufacturing partnerships to deliver custom home interior solutions. The company generates revenue through project fees, product sales, and subscription-based design services, but has faced challenges scaling profitably across diverse regional markets.

Industry Outlook

The home interiors marketplace sector has experienced significant consolidation following the pandemic-era expansion. Similar companies including Urban Company's home services division and HomeLane have also implemented workforce reductions as consumer discretionary spending normalizes.

Rising construction costs and supply chain disruptions have pressured margins across the industry, forcing companies to optimize operations rather than pursue aggressive growth strategies. The shift toward hybrid work arrangements has reduced the urgency for major home renovations that drove demand during 2020-2022.

Industry experts predict continued consolidation in the home improvement technology sector, with companies focusing on sustainable unit economics rather than market share expansion. The integration of artificial intelligence and automation tools is expected to further reduce labor requirements across design and customer service functions.

Conclusion

Livspace's workforce reduction represents a strategic pivot toward operational efficiency as the home interiors marketplace adapts to post-pandemic market realities. The company's focus on core design and manufacturing capabilities suggests a commitment to maintaining service quality while achieving financial sustainability.

The restructuring positions Livspace to weather continued market volatility while preserving its technology platform and customer relationships. Success will depend on the company's ability to maintain competitive service delivery with a leaner operational structure and navigate the evolving home improvement landscape effectively.