Even as Ola is hiring for its electric mobility business, the urban mobility firm is in the process of laying off about 1,000 employees, according to an ET report. The restructuring exercise, expected to be on for a few weeks more, is to focus more on its electric mobility business, where it is hiring “aggressively”, the report said quoting sources.
The process has been ongoing across verticals including mobility, hyperlocal, fintech, and its used cars businesses. Those targeted for layoffs have been asked to resign voluntarily, according to the report. It also added that the firm is delaying the appraisal process of some employees who it wants to fire, so that they resign.
However, the company is also hiring aggressively as it plans to manufacture lithium-ion battery cells and an electric car. It is hiring four people for every person being fired.
“Ola is planning to hire about 800 people for cars alone and additionally for cell development… Even as they are letting go of people, there are more people coming in. It is a repurposing process for the company rather than a cost-cutting process,” according to the report quoting a source.
Due to financial stress, start-ups in India have been resorting to lay-offs to cut costs. Recently, edtech unicorn start-up Byju’s laid off over 600 employees, including both permanent and contractual.
Before Byju’s, new-generation enterprises including Vedantu, Unacademy and Cars24 have also let go of over 5,000 employees in India this year. Ola has laid off about 2,100 employees during January-March this year, followed by Unacademy (over 600), Cars24 (600) and Vedantu (400). This apart, e-commerce firm Meesho has laid off 150 employees, furniture rental start-up Furlenco 200, influencer-led social commerce start-up Trell 300 employees and OkCredit has let go of 40 employees.
Unacademy co-founder and CEO Gaurav Munjal in a letter to employees said, “We must learn to work under constraints and focus on profitability at all costs. (Funding) winter is here… We must survive the winter.”
Recently, Canadian e-commerce firm Shopify also announced a cut in 10 per cent of its employees as it faces slowing growth due to a reduction in online shopping after a robust demand in the sector amid the pandemic. Shopify has announced a plan to lay off 1,000 employees as it failed to predict the scenario of slowing business post-COVID-19.
Shopify’s downward trod from the most-valuable company in Canada last year to its struggle in the present day comes as the retail industry with its brick and mortar stores are opening up slowly after the pandemic and customers are returning again to traditional offline shopping.
Sequoia Capital, a leading venture capital firm, in its 51-page note recently told founders of its portfolio companies that the era of being rewarded for hypergrowth at any costs is quickly coming to an end with investors shifting towards companies who can demonstrate current profitability. “Capital is becoming more expensive while the macro is becoming less certain, leading to investors de-prioritising and paying up less for growth.”
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