IPO-bound Ola Electric is reportedly preparing to lay off around 400-500 employees in the coming weeks as founder Bhavish Aggarwal focuses on reducing operating costs ahead of its listing.
What Happened: The final number of layoffs could change as the leadership team of the electric two-wheeler manufacturer is currently finalising the scale of these job cuts, which are expected to be spread across various verticals, Economic Times reported, citing sources.
Some of the affected employees may be replaced with new hires at relatively lower costs, but the overall headcount is set to shrink, according to the sources. Three or four teams said the numbers have already been finalised and the cuts are likely to be across the organisation, they added.
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Background: As of filing its draft IPO papers in December, Ola Electric had 3,733 employees as of October 2023. The company reported an employee attrition rate of 47.48% in FY23, according to the draft filings. Ola Electric aims to raise ₹5,500 crore through the sale of new shares in its IPO, pending approval from market regulator Securities and Exchange Board of India.
In April, Ola Cabs, the ride-hailing arm of the Ola group, laid off around 200 employees. Ola Cabs CEO Hemant Bakshi and CFO Kartik Gupta also exited the firm within two weeks.
Focus On Profits: The group and Bhavish Aggarwal’s focus is on profitability as both its cabs and electric vehicles arms are preparing to go public, one source told the business daily.
The proposed job cuts come as Ola Electric strives to maintain its leadership in India’s electric scooter market. In May, the firm sold over 37,000 scooters, securing a 50% market share. Overall non-commercial electric two-wheeler sales grew 17% from a month ago to over 74,000 units in May.
However, in April, sales fell nearly 50% from the previous month due to a seasonal slump and a shift in subsidies for the industry. Ola Electric sold 33,000 units in April, down from over 50,000 units sold in March when discounts and other marketing activities boosted sales.
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