• Source:JND
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Ola Electric, the subsidiary of ride-hailing company Ola, is set to lay off at least 500 employees as part of its restructuring amid losses and a government probe over poor product and service quality complaints. Reports suggest that Bhavish Aggarwal's electric vehicle (EV) company is working to enhance operational efficiency by cutting redundancies and focusing on boosting profit. The restructuring is expected to affect employees across various departments, the IANS report stated.

Although Ola Electric did not immediately comment on the layoffs, the Inc42 report stated that it is being done to drive profitability.

“The aim is to cut expenses to drive profitability and improve margins. There's no set time period for the completion of the exercise," the report stated citing sources.

The company reported a 43% rise in net loss to Rs 495 crore in the July-September quarter (Q2 FY25), up from Rs 347 crore in the previous quarter (Q1 FY25).

Additionally, the electric two-wheeler firm's revenue declined by 26.1% to Rs 1,214 crore compared to Rs 1,644 crore in the first quarter of the current fiscal year. However, the net loss showed an improvement year-over-year.

In the post-quarterly earnings call, Aggarwal said the company's operating expenses had decreased quarter-on-quarter and that the company would focus on cost efficiencies.

“As we continue to scale distribution, revenue will keep growing while the operating expenses are likely to remain flat or even decline over the next few quarters,” Aggarwal added.

The company also saw its market share plunge to 33 per cent in Q2, down from 49 per cent in the previous quarter.

According to experts, increased competition and service network challenges have impacted Ola Electric's market dominance.

The shares of Ola Electric continue to slide, more than Rs 38,000 crore worth of investors' money has been eroded in the company's stock in just a couple of months.

On Friday, the company's share was hovering around Rs 67 apiece, way below its market debut price of Rs 76 and more than 56 per cent down from its all-time high of Rs 157.40.

The market cap had reached an all-time high of around ₹ 69,000 crore, which has come down to around Rs 31,000 crore.

(With IANS Inputs)