The electric scooter manufacturer, OLA Electric Mobility Ltd., has reportedly begun laying off over 1000 employees and contract workers as part of cost-cutting, according to media reports.
The report added the layoffs mainly affect purchasing, customer relations, supply, and charging infrastructure departments as it’s trying to cut costs to stem losses.
Share Market Effect
Since the impressive IPO in August 2023, shares of Ola Electric have plunged by 60%. They have faced huge defeats, including customer complaints, scathing social media feedback, and falling market share that have drowned its business.
Although the electric scooter maker announced to have sold over 25,000 scooters in February, it only has 28% market share, which is below the desired 50,000 scooters that it aimed to sell in a month.
Moreover, the company alerted investors to further potential drops in registrations as it is also in talks with major suppliers to help it cut costs and turn operationally effective.
Second layoffs
Ola Electric has now announced the second big round of layoffs in a short span of five months. The company has been struggling with financial issues over the last few years. It has been facing mounting losses and that’s thought to have attracted the attention of market regulators and protection agencies for defending consumers.
Half a thousand employees were laid off in November 2023. From 4,000 employees in March 2024, Ola Electric’s latest layoff comes into play when more than 25% of their workforce will need to look for a new job.
Automation And Cost Efficiency
Ola Electric limited automation in its customer service operations to boost efficiency and reduce operational costs. This, according to a report by Bloomberg, will also see some important fronted processes automated already, thus improving profitability, reducing costs, and boosting customer experience.
Ola Electric has also cut the number of sales, service, and warehouse personnel across showrooms and service centres, aimed at streamlining logistics and delivery operations and cutting costs.
