Bengaluru/IBNS: Ola Electric, currently facing controversies, a government investigation, and rising losses, is reportedly preparing to lay off around 500 employees as part of a restructuring initiative, reports Inc42.
According to the report, the move aims to streamline operations, reduce redundancies, and enhance profitability.
Sources quoted in an Inc42 report revealed that the restructuring is focused on cutting costs and improving profit margins, with no specific timeline for its completion.
The layoffs will reportedly affect employees across several departments.
However, Ola Electric has not issued an official statement regarding the matter.
The Bhavish Aggarwal-led electric vehicle (EV) company reported a 43 percent increase in net losses during the July-September quarter (Q2 FY25), reaching Rs 495 crore, compared to Rs 347 crore in the previous quarter (Q1 FY25).
The companys revenue also fell by 26.1 percent on a quarterly basis, from Rs 1,644 crore in Q1 to Rs 1,214 crore in Q2.
Despite these setbacks, year-on-year (YoY) losses have narrowed.
In a post-earnings call, Aggarwal stated that operating expenses have declined quarter-on-quarter and reiterated the companys focus on cost efficiency.
He expressed optimism that as distribution scales, revenue growth will outpace expenses, which are expected to stabilise or decrease in upcoming quarters.
Ola Electrics market share in the electric two-wheeler segment has dropped from 49 percent in Q1 to 33 percent in Q2, attributed to rising competition and challenges in its service network.
Investor confidence has also taken a hit. The companys stock price, which debuted at Rs 76, has fallen to around Rs 67 per share, marking a significant decline from its all-time high of Rs 157.40.
Over Rs 38,000 crore in market value has been eroded, bringing the companys market capitalization down from a peak of Rs 69,000 crore to around Rs 31,000 crore.
Ola Electric has been grappling with numerous customer complaints related to software issues, battery performance, and jammed tyres.
This has prompted the Central Consumer Protection Authority (CCPA) to launch a comprehensive investigation into the companys consumer grievance redressal mechanisms.
Amid these challenges, the company continues to face mounting scrutiny as it seeks to navigate a path toward sustainable growth and profitability.
