In a significant move aimed at boosting profitability, Ola Electric, India’s leading electric two-wheeler manufacturer, is reportedly laying off 500 employees. The restructuring plan, as per a report by Moneycontrol, reflects the company’s efforts to streamline operations and improve margins as it navigates the competitive electric vehicle (EV) market.
This news comes at a challenging time for Ola Electric, which is under investigation for alleged poor after-sales service and product quality issues, adding to the company’s growing list of controversies.
Why the Restructuring?
Ola Electric, led by its ambitious Founder and CEO Bhavish Aggarwal, is said to be pursuing restructuring to make its EV business sustainable. Despite the success of its IPO in August, the company’s share prices have seen a dip recently, even though revenue increased in Q2 of FY 2024-25.
While Ola Electric employs over 4,000 people, this round of layoffs is part of its broader strategy to attain profitability. As of now, Ola Electric has not commented on the report of job cuts, leaving employees and stakeholders in speculation about the company’s direction.
Ola’s Tryst with Controversies
The layoffs come amidst a string of controversies, including an ongoing investigation by the Bureau of Indian Standards (BIS) over allegations of poor service and unfair trade practices. The probe was initiated by the Central Consumer Protection Authority (CCPA), which had issued a show-cause notice to Ola Electric.
The CCPA’s notice stemmed from over 10,000 customer complaints lodged against Ola Electric. These included allegations of misleading advertisements and subpar product quality. While Ola Electric claims to have resolved 99% of the complaints, the CCPA remains skeptical of the company’s efforts.
CEO Bhavish Aggarwal defended the company, stating that two-thirds of the complaints were minor issues, such as software unfamiliarity or loose parts. However, consumer dissatisfaction appears to have taken a toll on Ola Electric’s reputation.
Not Ola Electric’s First Restructuring
This isn’t the first time Ola Electric has resorted to layoffs. In 2022, the company cut 1,000 jobs as it shut down its used car and quick-commerce businesses to focus solely on its EV operations.
Ola Electric’s transition to a dedicated EV manufacturer was seen as a bold move, but challenges in scaling up production, maintaining quality, and ensuring customer satisfaction have posed significant hurdles.
