Ola Electric Mobility Ltd. is set to lay off over 1,000 employees and contract workers as it struggles to cut mounting losses, according to sources familiar with the matter.
The job cuts at the SoftBank-backed company will affect multiple departments, including procurement, fulfilment, customer relations, and charging infrastructure, the sources said. They requested anonymity as the information is not public.
This marks the second round of layoffs in less than five months. The company, led by Bhavish Aggarwal and listed on the stock market last August, has faced multiple challenges. It reported a 50% increase in losses for the December quarter and has recently been criticised by India’s market regulator and consumer protection body.
In November, Ola Electric reportedly laid off around 500 employees. The latest cuts account for over a quarter of its 4,000-strong workforce as of March 2024, though contract workers are not included in its public filings.
Restructuring and Cost-Cutting Measures
As part of its restructuring, Ola is automating parts of its customer relations operations, according to insiders. The exact number of job losses could change based on business needs, they added.
“We have restructured and automated our front-end operations, improving margins, reducing costs, and enhancing customer experience while eliminating redundant roles for better productivity,” an Ola spokesperson said in an emailed statement to Bloomberg, without confirming the number of employees affected.
Sales, service, and warehouse staff at Ola’s showrooms and service centres are also being made redundant as the Bengaluru-based firm revamps its logistics and delivery strategy to lower expenses, sources said.
Since its high-profile IPO in August, Ola Electric’s share price has plummeted by over 60%. The company has also faced growing customer complaints, social media criticism, and declining market share, losing its position as the sector leader to competitors.
On Friday, Ola Electric told stock exchanges that it had sold more than 25,000 units in February, giving it a 28% market share. This is well below the 50,000-unit monthly target CEO Bhavish Aggarwal previously stated was necessary for the company to break even on EBITDA (earnings before interest, tax, depreciation, and amortisation).
Earlier in the week, the company also warned investors that vehicle registrations would be impacted in February as it renegotiates agreements with two key suppliers to cut costs and improve efficiency.
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