Ola Electric Cuts Over 1,000 Jobs to Curb Losses: Bloomberg Report
Bengaluru — Ola Electric Mobility is laying off more than a thousand employees and contract workers as part of cost-cutting measures amid mounting losses, according to sources familiar with the matter.
The SoftBank-backed electric two-wheeler company has reportedly axed jobs across multiple departments, including procurement, fulfilment, customer relations, and charging infrastructure.
This marks the second round of layoffs in less than five months, reflecting Ola Electric’s struggles as it grapples with financial and regulatory challenges. In November 2024, the company had cut around 500 jobs, and the latest layoffs account for more than a quarter of its workforce, which stood at approximately 4,000 employees at the end of March 2024. However, the figure includes contract workers, whose numbers are not officially disclosed.
Declining Market Position and Financial Struggles
Ola Electric, which went public in August 2024 with a highly successful initial public offering (IPO), has since seen its stock price plummet by more than 60% from its peak. The company’s losses surged by 50% in the December 2024 quarter, exacerbating investor concerns.
On February 28, the firm disclosed that it had sold over 25,000 units in February, securing a 28% market share. However, this is significantly below the 50,000-unit monthly sales target that CEO Bhavish Aggarwal had earlier identified as the threshold for achieving EBITDA (earnings before interest, tax, depreciation, and amortisation) break-even.
In an effort to optimize costs, Ola Electric is automating parts of its customer relations operations. Layoff plans could evolve depending on business needs, insiders said.
Restructuring and Vendor Negotiations
The company is also letting go of front-end sales, service, and warehouse staff at its showrooms and service centres. The restructuring aligns with a broader strategy to revamp logistics and delivery operations to enhance cost efficiency.
Earlier, Ola Electric had informed investors that its vehicle registrations in February would be impacted due to ongoing negotiations with two key vendors to cut costs and improve operational efficiency.
Losing Ground to Rivals
Once India’s leading electric two-wheeler manufacturer, Ola Electric has been steadily losing market share. Bajaj Auto overtook it as the top electric scooter seller in December 2024, pushing Ola down to third place behind TVS Motor, according to government vehicle registration data.
The company has lost its dominant position in nine of India’s ten largest electric vehicle markets, according to a January 1 note by Jay Kale, an analyst at Elara Capital.
Efforts to Regain Market Trust
In a bid to counter growing customer dissatisfaction, Ola Electric launched a record 3,200 outlets in December 2024, expanding its footprint to improve service accessibility. Reports suggest that the company has been facing as many as 80,000 customer complaints per month, further straining its reputation.
While Ola Electric aims to streamline operations and recover lost ground, its latest round of layoffs underscores the mounting pressure to curb losses and regain investor confidence in an increasingly competitive market.
