Ola Electric has laid off more than 1,000 employees and contract workers as the company looks to curb rising losses, Bloomberg reported.
The cuts impact several departments, including procurement, fulfillment, customer relations, and charging infrastructure.
This marks the second major round of layoffs in less than five months, following a workforce reduction of around 500 employees in November.
The latest cuts account for over a quarter of Ola’s 4,000-strong workforce as of March 2024, though the inclusion of contract workers means the total impact is larger than publicly disclosed.
“We have restructured and automated our front-end operations, improving margins, cutting costs, and enhancing customer experience while eliminating redundant roles,” an Ola spokesperson said.
However, the company did not confirm the total number of workers affected.
Ola Electric Mobility’s share price fell by more than 5% on Monday. The stock has fallen by over 52% in the last six months.
Restructuring efforts and automation drive
As part of its restructuring, Ola Electric is automating several aspects of its customer relations operations.
The company is also revamping its logistics and delivery strategy, which has led to job losses across its showrooms, service centers, and warehouse operations.
According to the Bloomberg report, sources familiar with the matter said the company’s layoff plans may evolve depending on business needs.
Mounting losses and regulatory scrutiny
Ola Electric, backed by SoftBank Group, has been grappling with multiple challenges.
The company reported a 50% increase in losses for the December quarter, further straining its financial position.
Additionally, it has come under scrutiny from India’s market regulator and consumer protection authorities over various issues in recent months.
Shares of the firm have dropped more than 60% from their peak following its highly anticipated IPO in August.
Once the undisputed leader in India’s electric scooter market, Ola has steadily lost ground to competitors.
In December, Bajaj Auto overtook it as the market leader, causing Ola Electric to slip to third place behind TVS Motor Co. and another rival, according to government vehicle registration data.
Industry analysts point to increasing customer complaints, product quality concerns, and service-related issues as key factors contributing to Ola’s declining market share.
Reports indicate that the company has been dealing with as many as 80,000 customer complaints per month.
Sales slowdown and investor concerns
On Friday, Ola Electric reported selling over 25,000 units in February, securing a 28% market share.
However, this remains well below the 50,000-unit monthly sales target CEO Bhavish Aggarwal previously said was necessary for the company to break even.
Earlier in February, the company warned investors that its vehicle registrations would be impacted as it renegotiated supplier contracts to cut costs and improve efficiencies.
Ola Electric had previously embarked on an ambitious expansion strategy, opening 3,200 outlets in a single store launch blitz in December to boost its presence and address growing customer frustration over service delays.
However, despite these aggressive expansion efforts, Ola has continued to face operational and financial headwinds.
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