In an attempt to shore up profitability, Ola Electric Mobility Ltd. has laid off 100 employees every week since its service-related woes came to the fore nearly two months ago, said the people aware of the development.
Ola Going Through Turbulent Time
It appears that Bhavish Aggarwal led Ola Electric, is undergoing a turbulent phase which is mainly affected by layoffs, financial struggles, and intensified scrutiny from authorities.
The company appears to be all set to cut around 500 jobs across various departments as suggested by the report.
This is part of a restructuring initiative aimed at improving operational efficiency and driving profitability.
Further, these layoffs are designed to eliminate redundancies and optimize costs amid a challenging market environment, said the industry insiders.
Moving ahead, these restructuring efforts by Ola Electric, though lacking a defined timeline, underscores the company’s bid to stabilize margins.
Please note here that the company has yet not confirmed the news of layoffs officially as it did not provide any specific details about the departments affected.
Facing Revenue Loss
When it comes to the revenue, the company has reported a 43% increase in its net loss for the July-September quarter (Q2 FY25), amounting to ₹495 crore compared to ₹347 crore in the previous quarter.
It seems that the company’ revenue also took a hit, declining 26% to ₹1,214 crore from ₹1,644 crore in Q1 FY25.
Interestingly Aggarwal emphasized during the post-earnings call that operating expenses had decreased quarter-on-quarter, suggesting the company is focusing on cost efficiency as a pathway to recovery despite these setbacks.
Adding, “As we continue to scale distribution, revenue will grow while operating expenses remain stable or decrease.”
Besides this, there is also a reduction in Ola Electric’s market share in the electric two-wheeler segment, it has dropped from 49% in Q1 FY25 to 33% in Q2.
The factors such as Increased competition and service network issues have been cited in significantly contributing to this decline.
In addition to this, the consumer complaints regarding software glitches, battery performance, and mechanical failures like jammed tyres have further affected this condition.
Concerning the consumer grievances, the Central Consumer Protection Authority (CCPA) has initiated a probe into the company’s practices.
Now, all eyes are set on the company as they concern how it addresses these challenges and charts a path toward recovery during these turbulent times.
Comments are closed.