Bengaluru-based ride-sharing company Ola is restructuring and is cutting down its staff in the process.
According to sources, 8% of its staff — out of a total of 4,500 employees — will be cut down. While the layoff will happen from its core mobility business, some will be reassigned to other companies under Ola such as Ola Mobility and Ola Tech. 200-250 people are expected to be let go.
Ola’s move comes at a time when the company is gearing up for an IPO. “Profitability is a criteria as we’re headed towards an IPO. In the last year, we’ve cut our losses by 50%,” the source said.
Ola’s losses reportedly came down from Rs 2,676 crore to Rs 1,160 crore in the 2019 financial year.
It also reduced employee benefit expenses to Rs 414 crore from Rs 495 crore.
As Ola readies itself to go public, it is also looking at its governance and compliance processes.
“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. Hence, a redesign of our organization and processes is the need of the hour,” Ola’s group CFO Harish Abhichandani told employees, according to Economic Times.
An Ola spokesperson said that the company has grown not only its core business but also introduced new ones.
“To enable our rapid growth, we have continued to evolve every aspect of our operational philosophy at periodic intervals. With a view to become more nimble and have a sharper focus on growth and profitability, we are redesigning the organisation to build a structure that strengthens and leverages our local and global scale and enables faster decision-making across all of Ola's group companies,” the spokesperson said.
“Our organisational redesign aims to rightsize all our operations as well as leverage skills sets and experience of mobility employees in available positions in new business verticals,” the spokesperson added.