Ola Electric plans major layoffs ahead of IPO to control costs. Check details
Ola Electric is preparing to lay off approximately 400-500 employees across its organisation in an effort to control operating costs before its initial public offering (IPO), as reported by the ET. The exact number of layoffs is still being finalised, with the company's leadership currently determining the scale of the reductions.
Sources indicate that some of the affected employees might be replaced with new hires at a lower cost, although the overall headcount will decrease. Certain teams have already finalised the number of cuts, according to an individual familiar with the matter.
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Bhavish Aggarwal, Ola's founder, has been pushing for cost reductions across all departments. This move follows a previous round of layoffs in April, where Ola Cabs laid off around 200 employees. Additionally, Ola Cabs’ CEO Hemant Bakshi and CFO Kartik Gupta also departed the company during that period.
In its draft IPO papers filed in December, Ola Electric reported having 3,733 employees as of October 2023, with an employee attrition rate of 47.48 per cent for financial year 2022-23 (FY23). The company aims for profitability in both its cab and electric vehicle units, which are at different stages of going public.
Also Read : Ola Electric patents swappable battery, could power future electric offerings
For the first quarter of FY24, Ola Electric reported a net loss of ₹267 crore on operating revenue of ₹1,243 crore. In FY23, the company posted a net loss of ₹1,472 crore on operating revenue of ₹2,631 crore.
Earlier in the month, Ola Electric announced strong sales results for May 2024, with 37,191 units sold, representing a 6.26 per cent growth over the same month last year. The company has led the electric scooter market, holding a 49 per cent market share as of May.
Ola Electric’s growth is supported by the success of its new S1 X range, which includes the brand’s most affordable offerings. Ola Electric offers electric scooters in three battery sizes: 2 kWh, 3 kWh, and 4 kWh. These are priced starting at ₹74,999 for the base model, going up to ₹99,999 for the largest battery (all ex-showroom). They also have three scooter models, the S1 X+, S1 Air, and S1 Pro, priced at ₹89,999, ₹1.05 lakh and ₹1.30 lakh (ex-showroom) respectively. Ola Electric recently extended their warranty to 8 years or 80,000 km for all their scooters.
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