Ola initiates downsizing exercise
Ola has initiated downsizing plans across verticals, which has already impacted almost 30 contractual employees like product analysts along with the employees in Ola Dash and Ola Cars verticals which were shut down two weeks back.
According to a company insider, team heads have been asked to prepare a list of people for the layoffs. While BusinessLine could not determine the exact number of expected layoffs, reports indicate that the number could be around 400-500 employees.
Commenting on the issue, an Ola spokesperson said, “As the company grows, it is looking at leaner and consolidated teams and capabilities and scale in a manner that keeps its strong profitability intact.”
“Today Ola is one of the most profitable ride-hailing companies in the world with a very strong balance sheet. Our core continues to be the broader mobility industry, be it ride-hailing, auto retail, financial services, or electric vehicles,” the spokesperson added.
She noted that because of Ola’s focus on mobility, it has chosen to repurpose its used cars business (Ola Cars) and the capabilities to grow its Ola Electric sales and service network. “We also decided to wrap up our quick commerce business that organically did not lend itself to our mobility ambitions. Today our riding-hailing business is delivering its highest ever GMV month on month,” the spokesperson added, but did not reveal how much the GMV was.
Another source in the company noted that till now the majority impact is on the employees working in Ola Dash and Ola Cars. The laid-off employees are believed to have received at least two months of severance.
While the company does not disclose the exact number of employees it has, the mobility major is estimated to have about 5,001 – 10,000 employees as per its Linkedin page. The company insider quoted above added that firing and resignations are a frequent affair at Ola. The SoftBank-backed company has seen over 30 senior executive leaving the company since 2020, including the likes of Arun Srinivas, former COO and Global Chief Marketing Officer of Ola, Pranay Jivrajka, former CEO of Ola Foods, and Dinesh Radhakrishnan, former Chief Technology Officer of Ola, among others.
In May, BusinessLine reported that Ola Cars was shutting down operations in five locations — Nagpur, Visakhapatnam, Ludhiana, Patna and Guwahati. Ola Cars were launched in October 2021 with 30 cities and it planned to scale to over 100 cities by 2022. However, the number of operational cities was gradually decreasing. Chief Executive Officer of Ola Cars, Arun Sirdeshmukh, also exited the company in May 2022.
In January, Ola had announced plans to expand its quick commerce service, Ola Dash, by building a network of 500 dark stores spread across 20 cities in the next six months. However, in April, the company was reported to have heavily restructured the business and fired about 2,100 contract workers.
Ola Electric had to recall 1,441 units of its electric two-wheelers in the wake of an Ola scooter catching fire in Pune. At that time, the company said, “These scooters will be inspected by our service engineers and will go through a thorough diagnostics across all battery systems, thermal systems as well as safety systems.”
Even as it faces challenges in the two-wheeler EV market, the company has said it is doing R&D on developing an electric car by the end of 2023 or early 2024. Ola’s proposed IPO has also been delayed with CEO Bhavish Aggarwal indicating that it is now likely to happen only later this year or early next year.
July 07, 2022