Shares of Ola Electric Mobility saw a significant decline of over 5% during mid-session trading on Monday, triggered by reports that the company is planning to lay off more than 1,000 employees as it grapples with rising losses.
The company's stock fell sharply by 5.5%, hitting a 52-week low of ₹53.71 per share on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). This marks a dramatic 66% drop from its peak prices of ₹157.53 (BSE) and ₹157.40 (NSE) reached soon after its stellar stock market debut in August last year.
The broader market also traded lower on Monday, with the 30-share BSE Sensex declining by 224.16 points or 0.31% to settle at 72,973.94. The NSE Nifty similarly slipped by 62.85 points, or 0.28%, closing at 22,061.85.
Ola Electric Announces Second Major Round of Layoffs
According to recent reports, SoftBank-backed Ola Electric Mobility is undertaking a fresh round of layoffs, affecting employees across various departments such as customer relations, fulfilment, and procurement. This comes as the company's second major downsizing exercise within just a few months. In November of last year, Ola Electric had already reduced its workforce by approximately 500 employees, citing increased automation in customer service operations.Recent Sales Milestone Overshadowed by Cost-Cutting Measures
Despite the layoffs, the Bhavish Aggarwal-led company had recently reported robust sales numbers, selling 25,000 units of electric scooters in February. Ola Electric currently enjoys a dominant market share of over 28% in India's electric two-wheeler segment. These impressive sales were largely driven by strong consumer interest in its S1 electric scooter range and a well-established network of 4,000 sales-and-service outlets nationwide.To manage expenses better, Ola Electric recently announced the renegotiation of contracts with its vehicle registration agencies. The company's objective is to streamline processes and reduce operational costs further, addressing ongoing profitability concerns.
The ongoing layoffs indicate Ola Electric's continued efforts to realign its business operations to sustain growth in the competitive Indian electric mobility market.
