Ola Electric Layoffs: The road to remain a sustainable and leading electric two-wheeler manufacturing firm in the country is becoming a roller-coaster ride for Bhavish Aggarwal-led Ola Electric Mobility Ltd. The electric scooter maker has reportedly begun laying off over 1,000 employees and contract workers across various departments as part of its cost-cutting strategy.
According to multiple media reports, the layoffs will impact departments such as purchasing, customer relations, supply and charging infrastructure, as the company looks to manage costs and tackle mounting losses.
Market struggles and share price drop
Since the launch of its impressive IPO in August 2023, Ola Electric's stock has fallen by 60%. The company has faced issues such as customer complaints, negative reactions on social media, and declining market share, which has impacted its overall performance.
Also Read: Paytm Share Price: One97 Communications Shares Fall Over 4% On ED Notice; Details
Despite these hurdles, Ola Electric announced sales of over 25,000 scooters in February, securing a market share of 28%. However, this figure is still well below its target of selling 50,000 units per month.
In addition, the company warned investors that vehicle registrations may continue to decline as it renegotiates contracts with key vendors to improve cost efficiency and operational effectiveness.
Second layoffs in 5 months
Ola Electric continues to roll out its second significant round of layoffs in just five months. Despite support from SoftBank Group Corp, the company has been struggling with financial difficulties recently. Its losses widened by 50% in the December quarter, drawing the attention of market regulators and consumer protection agencies.
Recommended For You
Earlier, in November 2023, Ola Electric laid off about 500 employees. The company had about 4,000 employees as of March 2024, but this latest round of layoffs affects more than 25% of its workforce.
Focus on automation and cost efficiency
As part of its restructuring efforts, Ola Electric has implemented automation in its customer service operations to increase efficiency and reduce operating costs. A Bloomberg report suggests that the company has already automated several key front-end processes, leading to improved profitability, reduced costs, and improved customer experience.
Furthermore, Ola Electric has cut down the number of sales, service, and warehouse personnel across showrooms and service centres, aiming to streamline logistics and delivery operations and reduce costs.
Also Read: Reliance Industries Shares Tumble 3% To Hit New 52-Week Low Amid Heavy Selling, FIIs Exodus