Ola Electric Mobility Ltd is planning to lay off over 1,000 employees and contract workers as part of its effort to control growing losses, according to a Bloomberg report. The layoffs will affect several departments, including procurement, customer relations, charging infrastructure, and fulfilment. These cuts are aimed at reducing costs as the company, backed by SoftBank Group, has been grappling with financial struggles and regulatory scrutiny. Following the announcement, Ola Electric’s shares dropped 5%, hitting a 52-week low of Rs 54.
Ola Electric Announces Second Round of Layoffs Amid Rising Losses and Restructuring
This is the second round of layoffs in less than five months, with Ola Electric previously cutting around 500 jobs in November 2023. The latest layoffs represent more than a quarter of the company’s workforce of 4,000, though the full impact is unclear as contract workers are not included in the company’s public disclosures. As part of the restructuring, Ola Electric is automating parts of its customer service operations to improve efficiency, reduce costs, and enhance the customer experience. While the company did not confirm the number of layoffs, an Ola spokesperson noted the restructuring efforts were focused on improving margins and productivity.
The company is also letting go of employees in sales, service, and warehouse roles at showrooms and service centers while changing its logistics and delivery strategies to cut costs. Ola Electric, which went public in August 2023, has faced numerous challenges, including a 50% rise in losses for the December quarter. Its stock has fallen over 60% from its peak post-IPO, and the company faces increased competition, customer backlash, and criticism on social media.
Ola Electric Struggles to Meet Targets as Market Share Declines
Despite selling over 25,000 electric scooters in February and securing a 28% market share, Ola Electric’s performance is still well below its target of 50,000 units per month to achieve EBITDA breakeven. The company has also lost its top position in the electric scooter market to Bajaj Auto and TVS Motor Co. In an attempt to recover, Ola Electric launched 3,200 new outlets in December 2023, aiming to expand its reach and address customer service complaints, which amount to around 80,000 monthly.
