Ride-hailing giant Ola is in cost-cutting mode, with a reported 10% of its workforce facing the axe as part of a restructuring exercise. This news comes alongside the surprise departure of Hemant Bakshi, who joined as CEO just four months ago.
Burning Cash, New Leadership: The layoffs come amidst ongoing discussions with investment banks for a potential IPO. Ola is likely looking to streamline operations and improve profitability before going public. Bhavish Aggarwal, CEO of Ola Electric, will take over day-to-day operations until a new CEO is found. This leadership shakeup adds another layer of uncertainty to Ola’s future.
Strategic Shift and Shrinking Footprint: This restructuring follows Ola’s recent exit from international markets like the UK, Australia, and New Zealand. The company seems to be prioritizing the massive Indian market, where they face stiff competition from Uber.
Not the First Rodeo: This isn’t Ola’s first round of layoffs. In January, they let go of 200 employees after shuttering overseas operations. The company maintains these cuts are for “efficiency” and focus on core areas.
Financial Gains amid Workforce Reduction: Interestingly, Ola’s Mobility business in FY23 reported a positive EBITDA for the first time, indicating progress towards profitability. However, the company seems determined to tighten its belt further through these layoffs.
Industry-Wide Trend?: Ola isn’t alone in feeling the heat. Healthtech startup Healthify also confirmed a 30% workforce reduction in its quest for profitability. These moves signal a potential shift in the Indian tech startup scene, where aggressive growth strategies might be giving way to a focus on financial sustainability.
