Ola Electric Cuts Over 1,000 Jobs Amid Losses
Ola Electric Mobility is set to lay off more than 1,000 employees and contract workers as the company grapples with significant financial losses. This move marks the second round of layoffs in less than five months for the SoftBank-backed scooter manufacturer, which is striving to streamline operations across various departments. The restructuring comes on the heels of a 50% increase in losses reported for the December quarter, raising concerns about the company’s future in the competitive electric vehicle market.
Massive Layoffs Across Multiple Departments
Sources familiar with the situation revealed that the layoffs will affect several key areas within Ola Electric, including procurement, fulfillment, customer relations, and charging infrastructure. This decision follows a previous round of job cuts in November, where around 500 employees were let go. The current layoffs represent over 25% of Ola’s workforce, which stood at approximately 4,000 employees as of March 2024. Notably, the layoffs also include contract workers, who are not reflected in the company’s public disclosures.
In an effort to improve efficiency, Ola Electric is automating parts of its customer relations operations. An Ola spokesperson stated that the restructuring aims to enhance margins, reduce costs, and improve customer experience by eliminating redundant roles. However, the spokesperson did not confirm the exact number of positions being cut. The layoffs also extend to front-end sales, service, and warehouse staff at the company’s showrooms and service centers, as Ola seeks to revamp its logistics and delivery strategy to mitigate costs.
Financial Struggles and Market Challenges
Ola Electric’s financial woes have been exacerbated by a significant drop in its stock value, which has plummeted over 60% since its initial public offering (IPO) in August. The company has faced mounting criticism from consumers and has lost market share to competitors, which has further complicated its recovery efforts. In February, Ola Electric reported selling more than 25,000 units, capturing a 28% market share—far below the 50,000-unit monthly target set by CEO Bhavish Aggarwal during a recent earnings call.
Additionally, the company has indicated that its vehicle registrations will be affected as it renegotiates terms with vendors to cut costs and enhance operational efficiencies. Once a leader in the electric two-wheeler market, Ola Electric has seen its position erode, with Bajaj Auto Ltd. surpassing it as the market leader in December. According to industry analysts, Ola has lost its top position in nine of India’s ten largest electric vehicle markets.
Customer Complaints and Service Issues
Ola Electric’s challenges extend beyond financial losses, as the company has been inundated with customer complaints. Reports suggest that Ola faced as many as 80,000 customer complaints in a single month, prompting the company to launch a significant expansion of its service network. In December, Ola added 3,200 outlets in a bid to enhance its customer service and address growing frustrations related to service shortcomings.
Despite these efforts, the company continues to struggle to regain its footing in the competitive electric vehicle landscape. As Ola Electric navigates these turbulent times, the future of the company remains uncertain, with ongoing layoffs and restructuring efforts signaling a critical juncture in its operations.
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