Ola Electric, a subsidiary of ride-hailing company Ola, is set to lay off at least 500 employees as part of its restructuring amid a government probe into losses and complaints of poor product and service quality. Reports suggest that Bhavesh Agarwal’s electric vehicle (EV) company is working to increase operational efficiency by reducing redundancies and focusing on increasing profitability. The IANS report said that the reorganization will affect employees in various departments.

While Ola Electric did not immediately comment on the layoffs, the Inc42 report said it was being done to boost profits.

“The objective is to reduce costs to increase profitability and improve margins. There is no fixed time frame for the completion of the exercise,” the report said, citing sources.

The company reported a 43% increase in net loss to Rs 495 crore in the July-September quarter (Q2 FY25), up from Rs 347 crore in the previous quarter (Q1 FY25).

Additionally, the electric two-wheeler firm’s revenue declined 26.1% to Rs 1,214 crore in the first quarter of the current fiscal, compared to Rs 1,644 crore in the first quarter of the current fiscal. However, net loss showed year-on-year improvement.

In a post-quarterly earnings call, Agarwal said the company’s operating expenses had declined quarter-on-quarter and the company would focus on cost efficiencies.

“As we continue to scale the segment, revenue will continue to grow while operating expenses are likely to remain flat or even lower over the next few quarters,” Agarwal added.

The company also saw its market share drop to 33 percent in Q2, down from 49 percent in the previous quarter.

According to experts, increasing competition and service network challenges have affected Ola Electric’s market dominance.

Shares of Ola Electric have been falling steadily, with investors wiping out over Rs 38,000 crore in the company’s stock in just a few months.

On Friday, the company’s shares were hovering around Rs 67, down from its first market price of Rs 76 and over 56 percent from its all-time high of Rs 157.40.

The market cap, which had peaked at around ₹ 69,000 crore, has come down to around ₹ 31,000 crore.

(With IANS input)