Ola, the Bengaluru-based ride-hailing company, has announced layoffs of 1,400 employees due to the ongoing economic crisis caused by the COVID-19 pandemic. The layoffs represent 35% of Ola’s workforce and were made in response to a sharp decrease in demand for ride-hailing services across India.
Ola was founded in 2010 as an online cab aggregator by Bhavish Aggarwal and Ankit Bhati. The company’s initial focus was on providing a convenient and affordable transportation alternative to traditional taxis and auto-rickshaws in India’s major cities.
Since its founding, Ola has grown rapidly and expanded its offerings to include a range of transportation services, including micro, mini, and prime cabs, as well as bike and scooter rentals. The company has also expanded into international markets, including Australia, New Zealand, and the United Kingdom.
Funding and Investors
Ola has raised over $3.8 billion in funding to date from a range of investors, including Softbank, Tencent, and DST Global. The company’s most recent funding round, a Series J, raised $300 million in 2019.
Despite facing stiff competition from rival ride-hailing company Uber, Ola has continued to grow and expand its offerings. In 2018, the company announced plans to invest $100 million in building a new scooter-sharing business, Ola Electric, which aims to help reduce India’s dependence on fossil fuel-based transportation.
Reason for Layoffs
The COVID-19 pandemic has had a severe impact on the global economy, and the ride-hailing industry has been hit particularly hard. With lockdowns and social distancing measures in place across India, demand for ride-hailing services has plummeted, and Ola’s revenue has been severely impacted.
In response to the economic crisis, Ola has announced layoffs of 1,400 employees, representing 35% of its workforce. In a statement, the company cited the need to “moderate our growth plans and conserve cash balances” in order to weather the economic downturn.
Number of Employees Laid Off
Ola has laid off 1,400 employees, representing 35% of its workforce. The layoffs have affected employees across various functions, including business development, human resources, finance, and customer support.
Statement from Company Stakeholders on Layoffs
Ola’s founder and CEO, Bhavish Aggarwal, released a statement regarding the layoffs, saying that “these decisions are not reflective of the quality of the work done by the impacted individuals.” He went on to say that the company will be providing “enhanced severance benefits and outplacement services” to affected employees.