Ola Electric lays off over 1,000 workers as losses continue

Ola Electric, the electric vehicle (EV) giant, has laid off more than 1,000 employees and contract workers, as reported by Bloomberg. This decision comes in response to mounting losses and follows a similar workforce reduction in November 2024, when around 500 employees were let go. The latest round of layoffs, which affects several departments such as procurement, fulfillment, customer relations, and charging infrastructure, accounts for over a quarter of the company’s workforce of 4,000 employees. Including contract workers, the actual number of layoffs is likely even higher.

Ola Electric has made changes in its operations, including automation efforts and restructuring, aimed at improving profit margins, cutting costs, and enhancing customer experience. Despite this, the company has not disclosed the exact number of affected workers. A company spokesperson stated that the company had restructured and streamlined its operations to eliminate redundant roles, but the layoffs reflect the challenges Ola Electric is facing in the highly competitive EV market.

The company's stock price saw a sharp decline, dropping by more than 5% on Monday, continuing a downtrend that has seen the stock fall over 52% in the last six months.

Challenges in the EV Market: Losses and Competition Ola Electric, backed by SoftBank, is struggling with increasing losses, as indicated by a 50% increase in losses for the December quarter. The company is also under scrutiny from India’s market regulator and consumer protection authorities.

Once a dominant player in India's electric scooter market, Ola Electric has now slipped into third place, overtaken by competitors like Bajaj Auto and TVS Motor Co. According to government vehicle registration data, Ola Electric lost its top position in December 2024. This loss in market share can be attributed to customer complaints, product quality issues, and service-related concerns. Reports suggest that Ola Electric is grappling with as many as 80,000 customer complaints each month.

Sales Slump and Financial Struggles Despite selling over 25,000 units in February and capturing 28% of the market share, Ola Electric has fallen short of its goal to sell 50,000 units monthly, which CEO Bhavish Aggarwal had previously stated was necessary to break even. In February, the company had already warned investors of potential impacts on vehicle registrations as it renegotiated supplier contracts to cut costs and improve efficiencies.

Ola Electric’s aggressive expansion strategy, including the opening of 3,200 outlets in a single launch in December 2024, aimed to alleviate service delays and boost brand visibility. However, despite these efforts, the company is still grappling with operational and financial challenges that have impacted its position in the market.