Ola plans to reduce employee strength by 15-20 percent over the next six months to improve margins ahead of its plans to go public in the next two-three years, according to a report in The Times of India.
The majority of cuts would be from the operations team, the paper quoted sources. Ola employs 5,800-6,000 people across group companies and 8-10 percent of them from its electric mobility and financial services businesses would also be re-deployed, besides 350-400 fired.
Moneycontrol could not independently verify the report.
Over the past year-and-a-half, the company already cut its tech team to 150-200 people from 800 and has reduced employee expense to Rs 414 crore from Rs 495 crore.
Since growth in the ride-sharing space has stagnated, investors have put pressure on improving bottom lines. As such, job cuts are the quick path to increase profitability, a source said.
ANI Technologies, which runs Ola, has already halved its FY19 losses to Rs 1,160 crore from Rs 2,676 crore in FY18. Its revenue also grew by 26 percent to Rs 1,885 crore by March 2019.Currently valued at $6 billion, the company plans to file for an initial public offering (IPO) in two to three years.LIVE NOW... Video series on How to Double Your Monthly Income... where Rahul Shah, Ex-Swiss Investment Banker and one of India's leading experts on wealth building, reveals his secret strategies for the first time ever. Register here to watch it for FREE.