Ola Electric reportedly cuts office footprint to reduce costs

Ola has surrendered about 170,000 sq ft of office space in Bengaluru as part of cost-cutting measures, according to sources.

The company gave up over 112,000 sq ft at Prestige-RMZ Startech in Koramangala, with Accenture taking over the floors, and also relinquished nearly 60,000 sq ft at Infozone in Electronic City, where its Battery Innovation Centre is located.

Ola continues to occupy about 427,000 sq ft at Prestige Startech, with a lease valid until October 2030.

The space surrendered was initially leased in April 2023 during a period of rapid expansion.

The company said the workspace reduction was part of a broader business restructuring, with no plans for further office rationalization.

Ola has also been reducing its workforce gradually over the past two years, focusing on automation and leaner operations amid shifting market conditions.

🔗 Source: The Economic Times

🧠 Food for thought

Implications, context, and why it matters.

A government subsidy cut may help explain the timing of Ola’s cost-cutting

Ola expanded its office in April 2023, shortly before the Indian government cut electric vehicle (EV) subsidies starting June 1, 2023 1.
The change raised upfront scooter prices and helped drive a monthly industry sales drop of over 56% in June 2023, after a pre-hike rush in May 2.
Ola Electric’s sales also dropped month-on-month in June 2023 by about 39% 3.
More recently, reports say Ola Electric has struggled to raise new funding as investors turn cautious, with sales down and cash losses continuing 4.

Subsidy cuts add pressure for business models that hold up without policy help

Ola’s pullback adds to a wider reset in India’s crowded electric two-wheeler market, which had 135 players as of mid-2023, per Vahan data (India’s government-run vehicle registration database) cited by TechCrunch 2.
With smaller subsidies, companies now need to rely less on discounts and more on operations that can keep running with limited support 5.
India Ratings and Research (a credit rating agency) says this may push consolidation, since some firms can get squeezed when subsidy receivables stall and balance sheets weaken 6.
Ola Electric says it is building recurring revenue through paid software upgrades such as MoveOS+, along with other operational shifts, while aiming for better margins and profitability 7.