Ola Electric Lays Off Over 1,000 Employees Amid Rising Losses
The move comes as the SoftBank-backed company struggles to curb its growing financial losses.
New Delhi: Ola Electric Mobility has reportedly laid off more than 1,000 employees and contract workers in its second round of job cuts within months. The move comes as the SoftBank-backed company struggles to curb its growing financial losses.
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Job Cuts Across Multiple Departments
The layoffs are impacting several departments, including procurement, fulfilment, customer relations, and charging infrastructure. This marks the second major round of workforce reduction in less than five months, following the termination of around 500 employees in November 2023.
With this latest move, more than a quarter of Ola’s total workforce, which stood at 4,000 as of March 2024, has been affected. The job cuts also include contract workers who are not accounted for in the company’s public employment figures.
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Restructuring and Cost-Cutting Measures
As part of its restructuring, Ola Electric is automating sections of its customer relations operations. The company is also reducing its front-end sales, service, and warehouse staff at its showrooms and service centres to streamline logistics and delivery processes.
Reports suggest that the layoff numbers could change depending on the company’s evolving business needs. Ola Electric has yet to issue an official statement regarding the latest job cuts.
Financial Challenges and Market Performance
Ola Electric has been facing mounting financial pressure. The company reported a 50% increase in losses for the December quarter (Q3) and has come under scrutiny from India’s market regulator and consumer protection authorities.
Since its IPO debut in August 2023, Ola Electric’s stock has dropped over 60% from its peak.
Sales and Registration Issues
Despite reporting sales of over 25,000 electric scooters in February, capturing a 28% market share, concerns remain about vehicle registrations. Data from the government’s VAHAN portal indicates that only one in three Ola Electric scooters sold last month was officially registered.
The company has informed investors that its vehicle registrations in February were affected due to ongoing negotiations with two vendors to lower costs and enhance operational efficiency.
With financial challenges mounting and restructuring underway, Ola Electric’s future strategy remains under close watch by investors and industry experts.
