Ola Cabs, a prominent player in the ride-hailing industry, is undergoing a restructuring exercise that includes laying off approximately 10% of its workforce, translating to nearly 200 employees. The move comes as the company prepares for its planned initial public offering (IPO) and aims to enhance profitability and streamline operations.
Restructuring and IPO Plans
Ola Cabs intends to file its draft IPO papers with the Securities and Exchange Board of India (SEBI) within the next three months, with aspirations to be listed on the stock exchanges later this year. The restructuring primarily impacts support teams, aligning with the company’s increased focus on leveraging artificial intelligence (AI) in its operations. However, core technology and product teams remain unaffected by the downsizing process.
Founder’s Statement
In a letter addressed to the employees, Ola Cabs founder Bhavish Aggarwal emphasized that the restructuring aims to improve profitability and position the company for sustained growth in the future. The move reflects the company’s commitment to building a leaner team structure and ensuring sustainable growth strategies.
Leadership Changes
In a separate development, CEO Hemant Bakshi has resigned from his position within three months of joining the company. While Ola Cabs declined to comment on Bakshi’s departure, Aggarwal mentioned that Bakshi is leaving to pursue opportunities outside the company.
Financial Performance and Strategic Investments
Despite the layoffs, Ola Cabs reported operational profits of Rs 250 crore on a standalone basis in FY23, a significant improvement compared to the previous year’s losses. The company attributes this success to substantial investments in AI and technology, resulting in notable cost advantages. Aggarwal reiterated the company’s commitment to advancing in these areas to develop cutting-edge products and services across various business verticals.
Subsidiary IPO
Additionally, Ola Electric, a subsidiary of Ola Cabs, has filed draft IPO papers with SEBI, aiming to raise Rs 5,500 crore through the issuance of new shares. This move underscores the company’s broader strategy to capitalize on market opportunities and drive growth across its diverse portfolio.
