Around 1,000 workers in the sales, distribution, and marketing divisions of Ola Electric, the electric two-wheeler maker led by Bhavish Aggarwal, will be laid off as a result of an extensive internal restructuring initiative.
Internal Restructuring & Layoffs
The Bhavish Aggarwal-led electric two-wheeler maker is undergoing yet another internal restructuring in order to cut costs and make up for losses amidst the decline in market shares. The EV maker is set to lay off around 1000 employees.
Multiple departments, including charging infrastructure, customer relations, fulfilment, and procurement, will be impacted by the layoffs. According to people with knowledge of the situation, Ola Electric is attempting to save expenses by implementing layoffs. The company, backed by SoftBank Group Corp., has been dealing with financial losses and regulatory scrutiny.
This is the second round of layoffs in less than five months. According to reports, Ola Electric let go of about 500 workers in November 2024. The latest round of job cuts accounts for over a quarter of Ola Electric’s workforce of 4,000 as of March 2024. The precise impact is still unknown, though, because contract workers are not mentioned in the company's public reports.
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Automation & Cost-Cutting Measures
According to insiders, Ola Electric is automating multiple elements of its customer service operations as part of the restructuring. The aim is to increase customer satisfaction, cut expenses, and improve efficiency.
"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," an Ola spokesperson stated in response to the report.
The number of employees impacted by the layoffs was not confirmed by the corporation, though. Additionally, the company is letting go of sales, service, and warehouse staff at its showrooms and service centres, according to sources. To reduce costs, the Bengaluru-based company is modifying its delivery and logistical plans.
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Losses & Market Challenges
Since going public in August 2023, Ola Electric has faced multiple challenges. Financial strain was increased when the corporation reported a 50% increase in losses for the December quarter.
Following a successful IPO launch, Ola Electric's shares have dropped more than 60% from their peak. Additionally, the business has seen social media backlash, client complaints, and growing competition from other businesses.
On February 7, Ola Electric released its December quarter results, showing that its losses had increased in comparison to the same period the previous year. Compared to the same quarter last year, when the company's net loss was Rs 376 crore, this quarter's loss was Rs 564 crore. Revenue for the December quarter was Rs 1,045 crore, a 19.4% decrease from the previous year.
Ola Electric was formerly India's top maker of electric two-wheelers, but it has been falling behind its competitors.
The company was pushed to third position behind TVS Motor Co. as the best-selling electric scooter brand in December after being surpassed by Bajaj Auto Ltd. By the end of 2023, Ola Electric had lost its top spot in nine of India's top ten EV markets, according to government data on vehicle registrations.
In December 2023, Ola Electric opened 3,200 additional locations to increase its market share. The change was made in response to consumer complaints over the quality of the services and to broaden its reach. But according to sources, the business has been getting up to 80,000 complaints from customers each month.
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