Ola has started handing over pink slips to employees across software teams. Sources told CNBC-TV18 that at least 500 employees are likely to be laid off across different software verticals of ANI technologies. Many of these employees are believed to have been working on different aspects of the Ola app. The move comes against the backdrop of declining sales of the Ola Electric scooter.
Ola, which launched its electric scooter in December last year, has been carrying out a restructuring exercise for the past few months. The company had earlier laid off close to 2,000 employees due to the closure of the pre-owned car business, Ola Cars, and quick commerce business Ola Dash. More than 30 senior officials, including members of Bhavish Agarwal's leadership team, have quit in the last two years.
An Ola spokesperson declined to comment on the number of layoffs. Later, the company told CNBC-TV18 that 200 employees are likely to be impacted.
In a statement, the firm said, "Ola Electric, India’s largest EV company, has been increasing its focus on non-software engineering domains with a clear focus on building engineering and R&D capabilities across - vehicle, cell, battery, manufacturing and automation, autonomous engineering streams. The company currently has around 2000 engineers and aims to increase its engineering talent pool to 5000 over the next 18 months."
Therfore, the company is centralising operations and is undertaking a restructuring exercise to minimize redundancy and build a strong lateral structure that strengthens relevant roles and functions, as per the statement. The restructuring will impact approximately 10 percent of Ola’s overall engineering workforce, it added.
In March, an Ola S1 scooter caught fire. The case along with eight other incidents of electric scooter fires was investigated by a high-level committee, which found shortcomings in the BMS, safety mechanisms and the quality of cells used in the battery packs of different electric vehicle companies.
The company, which has been in the electric vehicle market for nine months now, has been facing many customer complaints about the software, battery performance, and service issues. From 12,691 scooters sold in April, the company's sales have been declining every month. According to the vehicle registration data, Ola sold a little over 3,351 vehicles in August, the lowest in the last six months.
The dip in sales may have also prompted Ola Electric to make changes to its online direct selling strategy. The company's founder Bhavish Agarwal recently asked customers for feedback on whether they would like to purchase scooters online or in retail stores. The founder tweeted to say that the company would launch 200 experience centres by March, in addition to the 20 already in place.