In preparation for its upcoming initial public offering (IPO), Ola Electric plans to lay off around 400-500 employees to manage operating expenses, as reported by ET. The final number of layoffs is still being determined, with company leadership assessing the extent of the reductions.
Efforts to Cut Costs
Insiders suggest that some laid-off employees might be replaced with new hires at a lower cost, although the total number of staff will decrease. Several teams have already decided on the number of positions to be cut. Bhavish Aggarwal, the founder of Ola, has been advocating for cost-saving measures across all departments.
Earlier Layoffs and Leadership Changes
This follows a previous reduction in staff in April when Ola Cabs cut about 200 jobs. During the same period, Ola Cabs’ CEO Hemant Bakshi and CFO Kartik Gupta left the company. These steps are part of a broader strategy to streamline the organization and reduce overheads.
Staff Turnover and Profit Objectives
In its draft IPO filings submitted in December, Ola Electric reported a workforce of 3,733 as of October 2023, with an attrition rate of 47.48% for the fiscal year 2022-23 (FY23). The company is targeting profitability in both its cab and electric vehicle segments, which are at various stages of going public.
Financial Results
For the first quarter of FY24, Ola Electric posted a net loss of ₹267 crore on operating revenue of ₹1,243 crore. In FY23, the company recorded a net loss of ₹1,472 crore on operating revenue of ₹2,631 crore, highlighting its financial challenges as it moves towards its IPO.
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