Ola Electric Restructures: 500 Employees To Be Impacted in Strategic Overhaul

In a bold yet sobering turn of events, Ola Electric, one of India’s leading electric vehicle (EV) manufacturers, is set to lay off approximately 500 employees. This decision, part of a broader restructuring strategy, is aimed at streamlining operations and steering the company toward long-term profitability in an increasingly competitive EV market.

The layoffs, which account for over 12% of Ola Electric’s workforce, are a strategic measure to eliminate redundancies, enhance operational efficiency, and align the organisation with its evolving business goals. A spokesperson from Ola Electric confirmed the move, stating, “This restructuring exercise will ensure we remain agile and competitive while sharpening our focus on core operations.”

The Financial Fork in the Road

Ola Electric’s financial performance sheds light on the rationale behind this decision. Despite recording a 38.5% year-on-year revenue growth in Q2 FY25, the company faced a significant net loss of ₹495 crore. Additionally, its market share has seen a notable dip—from over 50% in April to just 27% in September 2024—as competitors like TVS Motor, Ather Energy, and Bajaj Auto gained ground in India’s bustling e-scooter market.

This decline comes against a backdrop of rising operational costs, delayed breakeven points, and challenges in scaling after-sales services. These factors have left the company at a critical juncture, where restructuring appears to be the most viable path forward.

Customer Service Concerns: The Achilles’ Heel

While Ola Electric’s products have been praised for innovation and affordability, customer service has proven to be its Achilles’ heel. Instances of dissatisfaction with after-sales service have gone viral, including a recent incident where a customer smashed his Ola scooter with a hammer after being slapped with an unexpected ₹90,000 repair bill. This has sparked a broader conversation about the importance of robust service networks in sustaining market leadership.

In response, the company has announced plans to expand its sales and service network by onboarding 10,000 partners by the end of 2025. This move is expected to address customer grievances and build trust in Ola’s brand amid growing competition.

Recalibrating the Roadmap

The restructuring is also indicative of Ola Electric's strategic pivot. Earlier in 2024, the company suspended its ambitious electric car project to double down on its core two-wheeler business. Ola currently commands a 27% market share in the electric scooter segment, but with rivals catching up, this focus is crucial to maintain its foothold.

Additionally, Ola Electric’s plans to launch affordable two-wheeler models in the coming months are likely to bolster its appeal in price-sensitive markets. Combined with the restructuring, these initiatives aim to put the company on a path to profitability while ensuring scalability and sustainability.

Looking Ahead

The EV landscape in India is heating up, and Ola Electric’s restructuring marks a critical juncture in its journey. While layoffs are always difficult, they signal a recalibration of priorities to meet market demands and financial goals. As Ola Electric navigates this transition, the company’s ability to deliver on its promises—both to consumers and employees—will determine whether it remains a trailblazer in India’s EV revolution or risks becoming another cautionary tale.

The road ahead may be bumpy, but with the right strategy and execution, Ola Electric could emerge stronger, proving that sometimes, taking a detour leads to a better destination.