Bhavish Aggarwal-led Ola Electric Mobility, backed by SoftBank Group, is reportedly set to lay off more than 1,000 employees and contract workers in a bid to tackle escalating losses. The layoffs are expected to span departments such as procurement, fulfilment, customer relations, and charging infrastructure.
This move marks the second round of workforce reductions in less than five months, following the company’s decision to let go of 500 employees in November. Ola’s decision comes amidst a 50 per cent rise in losses for the December quarter and scrutiny from India's market regulator and consumer protection authority.
According to a report in Bloomberg, the latest wave of layoffs represents over a quarter of Ola's total workforce of approximately 4,000, which includes contract workers not publicly disclosed. As part of a restructuring effort, Ola is automating sections of its customer relations operations.
An official statement from Ola stated, “We have restructured and automated our front-end operations delivering improved margins, reduced cost, and enhanced customer experience while eliminating redundant roles for better productivity.” This overhaul has also impacted front-end sales and service staff in its showrooms and service centres, the report added.
Ola Electric’s shares have plummeted by over 60 per cent since its initial public offering in August. In February, Ola sold over 25,000 units, which was significantly below its target of 50,000 units, a benchmark set for achieving Ebitda breakeven. Adjustments with vendors have also affected vehicle registrations, as the company seeks to optimise costs and efficiencies.
In response to service-related complaints, Ola Electric has significantly expanded its presence by adding 3,200 outlets in December. This expansion was part of a strategy to address customer dissatisfaction, which had reached around 80,000 complaints in a month.