Ola Electric Said To Cut 1,400-1,500 Jobs In Search Of Profit

Ola Electric Mobility Ltd. has effected a second round of layoffs in less than six months to cut costs and turn profitable, at least on an operational level.

About 1,400-1,500 employees have been let go, people aware of the development said on Monday. About half of them are contractual employees and technicians who were hired to run the 4,000 sales and service centres opened in December last year. The rest include those involved in the supply chain, customer care and charging infrastructure.

The Ola Electric layoffs are a fallout of the expansion that hasn't translated into sales, one of the persons cited above said. Several of its experience centres are not selling even one scooter every month, this person said.

The environment within Ola Electric is still suffocating, a second person said, with team leads still getting fired on a weekly basis.

In November 2024, NDTV Profit reported that at Ola Electric, layoffs had become a Friday feature. The company had fired at least 100 employees every week in the two months following its listing in August.

Profitability Goals

All of this is aimed at turning profitable, at least operationally, the second person said.

Ola Electric needs to consistently sell 50,000 units per month to achieve profitability, founder billionaire Bhavish Aggarwal had said at an analyst call after the company's December quarter earnings.

“We are looking at a monthly sales figure of 50,000 units in order to break even in terms of Ebitda (earnings before interest, taxes, depreciation and amortisation) from our auto sales,” he had said then. “To do this, we are diversifying our portfolio by simultaneously selling two generations of our EV scooters to grow margin and volume.” 

“We are also expecting the battery cell manufacturing division to start reaping us benefits in terms of expanding our operating margin, and finally, the motorbike category will expand in terms of sales through this calendar year.

“Overall, we expect this to help our gross margin expand, and maintain market leadership despite the competitive industry right now.”

In the three months ended Dec. 31, Ola Electric's consolidated net loss widened to Rs 564 crore from Rs 376 crore in the year-ago period even as revenue shrunk by a fifth. Ebitda loss stood at Rs 460 crore as against Rs 301 crore. In the second quarter, Ebitda loss narrowed to Rs 379 crore from Rs 435 crore. It was Rs 354 crore in the first quarter.

To be sure, it was in the December quarter that Ola Electric quadrupled the number of its sales and service centres to grow sales. That hasn't happened, yet.