Ola reorganizes business, cuts staff ahead of planned IPO, sources say

Indian cab-hailing leader Ola is laying off 5% to 8% of its overall staff as part of a wider reorganization plan, affecting roughly 350 jobs, The Economic Times reported, citing people familiar with the matter.

A number of employees are also being moved to Ola’s other businesses, including Ola Electric and Ola Financial Services, the people added.

Photo credit: Ola

Ani Technologies, the owner and operator of Ola, employs roughly 4,500 people.

In addition to the layoffs, the company is also planning to improve its governance and compliance processes ahead of an initial public offering, which it expects to occur in 18 to 20 months, two top Ola executives said.

“As a business, we need to exercise sharper focus on metrics like revenue, growth, and profitability. We also need to refresh the way we run our daily operations – processes, people, productivity,” Ola group chief financial officer Harish Abhichandani said in an email to company staff acquired by The Economic Times.

The exec added that as part of the reorganization, Ola will continue to consolidate functions and evaluate how technology can help transform its current and largely manual processes.

“A sharp wage bill and marketing cuts are needed to make for positive unit economics and overall profitability. Ola has begun streamlining its business from that perspective,” a top Ola executive said.

Separately, the company reported revenue at about US$301 million during the fiscal year, up 16% from its 2018 results. Ola also posted narrowing losses during the year, coming in at roughly US$162 million.

Ola has been increasing its efforts to diversify beyond its cab-hailing business. Earlier this year, it was reported that the company moved Ola Money outside of Ani Technologies, aiming to raise funds for the financial services business separately.

Its electric vehicle (EV) unit Ola Electric secured US$250 million earlier this year from Japan’s SoftBank.

Ani Technologies is set to receive US$300 million from Hyundai Motor Company and Kia Motors Corp in exchange for a stake in the company. Under the deal, the three firms will jointly develop fleet and mobility solutions to build India-specific EVs and infrastructure.