Ola may lay off up to 500 employees in order to drive cost-efficiency

Layoffs may take place across Ola departments amid challenging funding environment and delay in listing plans

SoftBank-backed mobility platform Ola is in the process of laying off 400-500 employees -- in a move aimed at driving cost efficiency, revealed sources. They said these layoffs are taking place across departments, amid a challenging funding environment and a delay in listing plans for the Bhavish Aggarwal-led firm.

This development comes days after the company shut down its used vehicle business Ola Cars and quick-commerce business Ola Dash which promised 10-minute food delivery. It has repurposed the infrastructure and capabilities of the Ola Cars business towards boosting the Ola Electric sales and service network.

The company shut down Ola Cars within a year of its launch as it shifted focus to its electric two-wheeler and car verticals. Ola has, so far, shut down Ola Cafe, Food Panda, Ola Foods, and Ola Dash.

Ola has a total workforce of around 5,000 people. An Ola spokesperson declined to comment on the layoffs but said that as the firm continues to grow, it will look at leaner and consolidated teams and capabilities, and scale in a manner that keeps the firm’s strong profitability intact. “Today our riding hailing business is delivering its highest ever GMV (gross merchandise value) month-on-month,” said the spokesperson.

In May 2020, Ola announced laying off 1,400 employees, or over 33 per cent of its workforce, as Covid-19 continued to hurt the transportation industry. The Bengaluru-based firm said it had to opt for sackings because the situation was not expected to improve anytime soon.

Ola noted the company is one of the most profitable ride-hailing companies in the world with a strong balance sheet. “Our core continues to be the broader mobility industry, be it ride-hailing, auto retail, financial services or electric vehicles,” said the spokesperson.

Arun Sirdeshmukh, chief executive officer of Ola's vehicle commerce division, recently left the firm. Sirdeshmukh's exit came after the company’s chief financial officer (CFO), G R Arun Kumar, took up a wider role in the ride-hailing firm, according to the sources.

In October last year, it unveiled Ola Cars to provide vehicle purchase and ownership experience to consumers. Ola Cars was part of Ola’s larger vision of 'New Mobility' that encompassed three key pillars. It included ‘new mobility services’, expanding from 150 to 500 cities and increasing the reach from 100 million people to 500 million people. In fact, the company had then said it planned to hire 10,000 people, as it eyes a market leadership position with $2-billion gross merchandise value (GMV) for Ola Cars over the next 12 months.

Early this year, Ola announced expansion plans Ola Dash and said that the business aimed at expanding its dark store network to 500 dark stores in six months spread across 20 cities. The term dark store refers to a retail outlet or distribution centre that caters exclusively to online shopping. The move had put Ola in competition with players, such as Reliance-backed Dunzo, Amazon, Walmart-owned Flipkart, Swiggy, Zomato, Tata-backed Bigbasket, and quick grocery delivery platform Zepto.