Ola Electric Mobility, one of India’s largest scooter makers, is laying off more than 1,000 employees and contract workers as it races to cut ballooning losses, people familiar with the matter said.
The layoffs at the SoftBank Group Corp-backed company span several departments, including procurement, fulfillment, customer relations and charging infrastructure, people familiar with the matter said. They requested anonymity because the information is private.
This is the second round of layoffs in less than five months at the Bhavish Aggarwal-led company, which went public last August and is battling a crisis on multiple fronts. The company posted a 50% surge in losses in the December quarter and has been reprimanded by India’s market regulator and consumer protection agency in recent months.
According to local reports, about 500 employees were laid off last November. The current round of layoffs represents more than a quarter of Ola’s 4,000 employees as of March 2024, but it includes contract workers not included in the company’s public disclosures.
As part of the restructuring, Ola is automating parts of its customer relations operations, people familiar with the matter said. They added that layoff plans may change over time based on business needs.
“We have restructured and automated our front-end operations to improve margins, reduce costs and enhance customer experience while eliminating redundant roles to improve productivity,” an Ola spokesperson said in an emailed response to Bloomberg, without mentioning the number of layoffs.
Front-end sales, service and warehouse employees at Ola’s showrooms and service centers have also been laid off as the Bengaluru-based company revamps its logistics and delivery strategies to reduce costs, people familiar with the matter said.
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Ola Electric’s shares have fallen more than 60% from their peak since its IPO in August. The company has been the target of buyer complaints, social media backlash and market share losses in recent years as rivals toppled it from its position as industry leader.
Ola Electric told Indian exchanges on Friday that it sold more than 25,000 units in February and had a market share of 28%, well below the Ebitda break-even threshold of 50,000 units per month that Aggarwal had stated during an earnings call on February 7.
Ebitda is earnings before interest, taxes, depreciation and amortization.
Days earlier, the company told investors that its vehicle registrations would be affected in February as it renegotiates terms with two suppliers to reduce costs and improve efficiency.
Ola was once India’s dominant electric two-wheeler maker, but it has been steadily giving way to rivals.
Bajaj Auto Ltd. overtook Ola Electric as the leader in the electric scooter market in December, pushing Ola Electric to third place behind TVS Motor Co., Indian government vehicle registration data showed.
By December, the company had lost its market leadership in nine of India’s top 10 EV markets, Jay Kale, an analyst at local brokerage Elara Capital, wrote in a January 1 report.
Ola Electric added a record 3,200 stores in a one-off store blitz in December to expand its reach and address customer dissatisfaction over service shortcomings. Local media reported that the company faced as many as 80,000 customer complaints in one month.
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