Ola may join the bandwagon and lay off 400-500 employees in a cost cutting exercise.
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IPO plans
The company has been hit by a delay in listing plans and a tough funding environment.
It was planning an IPO this year but will now go for a new round of funding at a lower valuation.
A source familiar with the latest development said that key managers were asked to create a list of people from their respective teams last week to lay off.
Shedding flab
The move comes after the company shut down Ola Dash, its quick commerce business.
The service was almost a year old but faltered with regards to revenue and business.
Ola has so far shut down Ola Cafe, food panda, Ola Foods, and Ola cars- Ola’s used vehicle business .
Ola Cars’ infra, technology and capabilities will be “repurposed towards growing Ola Electric’s sales and service network”.
Pivot
It also reoriented its cars business to focus more on strengthening its electric division.
The company had said back then that its moves are part of its strategy to accelerate its electrification journey and build on its core capabilities in Mobility services and Financial services.
It now aims to invest more towards its electric car, cell manufacturing, and financial services businesses.
Shrinking international presence
Ola has also paused its investments in overseas markets where it is present, such as the UK, Australia, and New Zealand.
It has ceased funding in these locations since it has a single-digit market share now in the UK and New Zealand.
Revenue, workforce
Sources estimate that Ola has around 1,000-1,100 employees in the core mobility business.
The firm makes Rs 100-150 crore a month in revenue, with a profit of around Rs 40-50 crore.
Its riding hailing business delivers the company’s highest ever GMV (gross merchandise value) month on month.
Gaining from mass layoffs
Ola said that it will now look to “leaner and consolidated teams and capabilities” and scale in a manner that keeps its profitability intact.
Lessening cash burn-heavy businesses like Dash and cutting employee costs will give them more operational runway.
It will also help present a profitable business if they go for an IPO.
Shuffle at the top
It’s not just regular employees but also the top brass which are either stepping back or leaving the company.
Founder and CEO Bhavish Aggarwal stepped back from day-to-day operations to focus more on engineering functions, team building, and products.
Yashwant Kumar, who is Senior Director and Business Head for Charging Networks at the company, has decided to move on, as reported on July 4.
Last month, Ola Electric’s Director HR, Ranjit Kondeshan also chose to move on.