The move is part of the startup’s strategy to reduce its costs amid a funding winter
Ola has also ceased making investments in international markets such as the UK, Australia and New Zealand
Recently, Ola shut its user car business Ola Cars and quick commerce business Ola Dash to focus on its electric vehicle manufacturing business
Amid the funding winter, ride-hailing startup Ola is reportedly looking at cutting its costs significantly, which would result in the unicorn laying off around 400-500 employees.
The startup asked its key managers last week to prepare a list of employees that could be let go, Moneycontrol quoted a source as saying.
Besides, Ola has also ceased making investments in international markets such as the UK, Australia and New Zealand, another source told the publication.
“Shedding cash burn heavy businesses like Dash and cutting employee costs will give them more operational runway and also show a profitable business if they want to IPO,” the second source was quoted as saying.
Recently, Ola shut its used car business Ola Cars and quick commerce business Ola Dash to focus on its electric vehicle manufacturing business.
“With this clear focus, Ola has reassessed its priorities and decided to shut down Ola Dash- its quick commerce business. Ola will also be reorienting its Ola Cars business to focus more on strengthening go-to-market strategy for Ola Electric,” a company spokesperson told Inc42 then.
The fire incidents involving two-wheeler electric vehicles (EVs) of Ola Electric and a few other original equipment manufacturers (OEMs) have raised safety concerns among customers. This has led to a decline in demand for Ola Electric’s vehicles. Its vehicle registrations fell 36% month-on-month (MoM) to 5,883 units in June after witnessing a 27% MoM drop in May.
The Bhavish Aggarwal-led startup also fell two spots lower to fourth position in terms of two-wheeler EV registrations in June.
Ola Electric is also working on launching its electric car, and recently unveiled its design at a customer event.
Funding Winter And Layoffs
The ongoing Russia-Ukraine war, rising inflation and tightening of monetary policies by central banks have led to a global economic slowdown and fears of an impending recession. This has also made investors’ wary of investing in startups, resulting in a tough funding environment, which is being called funding winter.
Amidst these, a lot of startups have started laying off employees to bring down costs and conserve cash.
Recently, edtech giant BYJU’S-led WhiteHat Jr sacked nearly 300 employees across sales, marketing, operations and several other divisions in order to trim costs. Besides, insurtech startup Nova Benefits sacked close to 70 employees as part of the business restructuring process.
According to Inc42’s layoff tracker, Indian startups have laid off over 11,160 employees in 2022 so far. Some of the notable startups that have given pink slips to employees include Vedantu, PharmEasy, LIDO, Meesho, Trell, among others.
