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Ola plans to slash jobs ahead of IPO

Valued at around $6 billion, Ola plans to go public in around two to three years and being profitable before filing for an IPO is a desirable situation.

Last Updated: Nov 29, 2019, 09.05 AM IST
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The development comes as Ola, run by ANI Technologies, reduced its losses by 57 per cent to Rs 1,160 crore during FY19 from Rs 2,676 crore in FY18.
(This story originally appeared in on Nov 29, 2019)
New Delhi: Ride-hailing major Ola is planning to cut its workforce by 15-20 per cent over the next two quarters in a bid to improve margins and move towards profitability, sources said. Ola is estimated to have 5,800-6,000 people on its payroll, including group companies — Ola Electric Mobility and Ola Financial Services, where about 8-10 per cent of the employees could be redeployed besides laying off over 350-400 people.

The development comes as Ola, run by ANI Technologies, reduced its losses by 57 per cent to Rs 1,160 crore during FY19 from Rs 2,676 crore in FY18. The Bengaluru-based company saw its standalone revenue growing by 26 per cent to Rs 1,885 crore at the end of March 2019, according to its filings with MCA.

“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. Our organisational redesign aims to right-size all our operations as well as leverage skills sets and experience of mobility employees in available positions in new business verticals. The resultant working model will form the foundation of the next chapter in Ola’s growth journey, as we continue to grow our existing businesses at home and around the world,” an Ola spokesperson said in response to an email from TOI.
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Valued at around $6 billion, Ola plans to go public in around two to three years and being profitable before filing for an IPO is a desirable situation.

A large part of the layoffs will be across its operations team, which currently comprises around 1,500 people, said two people familiar with the development. Bengaluruheadquartered Ola, backed by investors including Temasek and SoftBank, has seen the size of its tech and engineering team shrink from over 800 to 150-200 in the last 12-18 months. “There is pressure from investors. The cab business in India has more or less been stagnant. The only way to improve profitability quickly is by reducing headcount,” said a source.




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