Ola Electric to Lay Off 500 Employees Amid Restructuring and Financial Losses
New Delhi: Ola Electric, the prominent electric vehicle (EV) manufacturer led by Bhavish Aggarwal, is set to lay off at least 500 employees as part of a restructuring exercise aimed at improving operational efficiency and boosting profitability. This move comes as the company faces mounting controversies, including a government probe into its practices and significant financial losses.
The company, which has been grappling with declining revenues and increased competition, aims to cut redundancies and reduce costs to improve its margins. Reports suggest that the layoffs will impact employees across several departments, though Ola Electric has not immediately commented on the specifics.
In the July-September period (Q2 FY25), the company reported a 43% increase in net loss, which rose to Rs 495 crore compared to Rs 347 crore in the previous quarter. Additionally, revenue slumped 26.1% to Rs 1,214 crore, down from Rs 1,644 crore in the first quarter of this fiscal year. However, the net loss showed a year-on-year improvement.
Ola Electric has faced growing challenges, with its market share in the electric two-wheeler sector dropping to 33% in Q2, down from 49% in the previous quarter. Experts attribute this decline to increased competition and issues related to its service network, which has affected the company’s market dominance.
Despite the losses, Bhavish Aggarwal, the CEO, has stated that the company’s operating expenses have decreased quarter-on-quarter and emphasized that cost efficiencies would be a focus in the coming quarters. He also expressed optimism that as distribution scales, revenue would continue to grow, and operating expenses would likely remain flat or even decline.
Ola Electric’s stock has faced significant setbacks, with more than Rs 38,000 crore in market value being wiped out in recent months. The company’s shares were hovering around Rs 67 per share on Friday, well below its market debut price of Rs 76, and more than 56% down from its all-time high of Rs 157.40.
The company has also faced consumer complaints, including issues with software, battery performance, and jammed tyres. This has led to an investigation by the Central Consumer Protection Authority (CCPA) regarding Ola Electric’s consumer complaint redressal practices.
As the company undergoes restructuring and navigates its financial challenges, Ola Electric is seeking to regain investor confidence and strengthen its position in the competitive EV market.
