Ola Electric plans to lay off around 500 employees: Report
What's the story
Ola Electric, the Bengaluru-based electric two-wheeler manufacturer, is planning to lay off between 400-500 employees in the coming weeks, as per the Economic Times.
The decision comes as part of an effort by founder Bhavish Aggarwal to reduce operating costs ahead of the company's initial public offering (IPO).
The exact number and distribution of layoffs across different verticals are yet to be finalized by the leadership team.
Cost cutting
Ola Electric's cost reduction strategy amid IPO plans
The company may replace some of the laid-off employees with new hires at a lower cost, resulting in an overall decrease in headcount.
"Inside, they (Ola Electric team) are finalizing the list across different teams," said a source familiar with the matter told the Economic Times.
Aggarwal has been consistently pushing for cost reductions across all avenues, according to the report.
IPO and attrition
Ola Electric's IPO and recent employee attrition
As of October 2023, Ola Electric reported a workforce of 3,733 employees in its draft IPO papers filed in December.
The company also disclosed an employee attrition rate of 47.48% for FY23.
The application for the IPO is still under review by market regulator SEBI.
Ola Electric aims to raise ₹5,500 crore through the sale of new shares as part of its public offering plan.
Profitability push
Ola Group's profitability focus amid public offering plans
This news follows recent layoffs at Ola Cabs, another business under the Ola group, which cut around 200 jobs in April.
"The focus across the group is to get to profitability as both units—cabs and electric vehicles—are in various stages of going public," the Economic Times quoted the source.
In FY23, Ola Electric reported a loss of ₹1,472 crore on operating revenue of ₹2,631 crore and a loss of ₹267 crore for Q1 FY24 on operating revenue of ₹1,243 crore.