After Narayana Murthy’s Infosys, now Bhavish Aggarwal’s OLA layoffs thousands of employees, says ‘eliminating....
According to a media report, Ola's current layoffs are parts of its automation for its customer relations operations and also an effort for a broader restructuring process.
Recently Narayana Murthy's Infosys was making headlines for laying off hundred trainees from its Mysore campus. Now another Indian company, Ola Electric Mobility Ltd has laid off more than 1,000 employees and contract workers in an effort to cut losses and streamline operations, according to a Bloomberg report which cites insider sources. The layoffs are part of a larger restructuring strategy that includes automating customer relations and revamping logistics and delivery processes.
OLA Layoffs Impact
The layoffs have impacted multiple departments, including charging infrastructure, customer relations, procurement, and fulfillment. Additionally, employees in front-end sales, service, and warehouse roles at Ola's showrooms and service centers have also been affected as the Bengaluru-based company works to optimize costs and enhance productivity.
The current round of layoffs represents over 25% of Ola's workforce, which stood at approximately 4,000 employees as of March 2024. However, this figure includes contract workers, who are not part of the company's public workforce disclosures.
OLA's Cost-Cutting Measures
Ola is automating several aspects of its customer relations operations to improve margins, reduce costs, and enhance the customer experience, claimed the same media report. An Ola spokesperson confirmed the restructuring in an email to Bloomberg, stating, "We have restructured and automated our front-end operations, delivering improved margins, reduced costs, and enhanced customer experience while eliminating redundant roles for better productivity."
The company's layoff plans are reportedly subject to further changes based on evolving business needs.
Ola Electric Share Price Decline
The layoffs follow a challenging period for Ola Electric. The company reported a 50% increase in losses for the December 2024 quarter, reflecting significant financial strain. Shares of Ola Electric fell by 5.36% on Monday, hitting a 52-week low of Rs 53.71 on the BSE. This marks a 66% decline from its peak of Rs 157.53, achieved after the company's IPO debut in August 2024.
This is the second round of layoffs in less than four months; in November 2024, Ola let go of nearly 500 employees.
Ola's Market Position
Despite its efforts, Ola has faced increasing challenges, including growing consumer complaints, social media criticism, and huge competition in the EV sector. These factors have contributed to the erosion of its market dominance and share price decline.
On Friday, Ola Electric disclosed to Indian exchanges that it sold over 25,000 units in February, securing a 28% market share. However, this falls short of the 50,000-unit monthly target that CEO Bhavish Aggarwal had set which was necessary to achieve EBITDA breakeven during a February earnings call.
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