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June 3, 2024

IPO-Bound Ola Electric to Lay Off 400-500 Employees in Cost-Cutting Move

Ola Electric, a prominent player in the electric vehicle (EV) market, is reportedly planning to cut its workforce by 400-500 employees as part of a strategic move to streamline operations and reduce costs. This decision, driven by founder Bhavish Aggarwal, comes in anticipation of the company’s initial public offering (IPO), as reported by ET.

Sources familiar with the matter have indicated that the final number of layoffs at the Bengaluru-based company is still being determined. The leadership team is currently assessing the extent of the job cuts, which are expected to impact various departments across the organization. While some affected employees might be replaced with new hires at a lower cost, the overall headcount is anticipated to decrease.

“Inside, they (Ola Electric team) are finalizing the list across different teams. Three to four teams have already decided on the numbers, but the cuts will be organization-wide,” a source told ET. The source added that Aggarwal has been consistently pushing to reduce costs across all avenues.

This restructuring effort follows previous rounds of layoffs at Ola Electric. In January last year, the startup laid off 200 employees across Ola Cabs, Ola Electric, and Ola Financial Services. More recently, in April this year, Ola Cabs laid off around 10% of its workforce, or about 200 employees, according to a report by Inc42.

Ola Electric is also awaiting approval from the Securities and Exchange Board of India (SEBI) for its INR 7,250 crore IPO. The IPO will include a fresh issue of INR 5,500 crore and an offer-for-sale (OFS) component of INR 1,750 crore. The EV manufacturer aims to debut in the market later this year.

The decision to cut jobs coincides with a recent downturn in demand for electric two-wheelers, which has affected many players in the sector. Despite a significant 35% month-on-month decline in vehicle registrations to 33,062 units, Ola Electric maintained its leading position, having recorded its highest-ever monthly registrations of over 50,000 units in March. In response to the slowdown, the company reduced the prices of its latest e-scooter range, the S1 X, last month. Prices now range from INR 69,999 to INR 99,999, down from the previous range of INR 79,999 to INR 1,09,999.

As Ola Electric prepares for its IPO, the company is taking strategic steps to ensure financial stability and operational efficiency. By reducing its workforce and cutting costs, Ola Electric aims to present a leaner and more efficient business model to potential investors. This move, while challenging for those affected, reflects the company’s commitment to long-term growth and market competitiveness.

In conclusion, Ola Electric’s decision to lay off 400-500 employees is a significant step towards streamlining operations and reducing costs ahead of its anticipated IPO. With market conditions influencing demand for electric two-wheelers, the company is making strategic adjustments to maintain its leading position in the EV market. As Ola Electric awaits SEBI approval for its IPO, the company is poised to make its market debut with a focus on financial stability and operational efficiency.

Read more Business related news on R9 News
Jhumpa Lahiri

Jhumpa Lahiri

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