Ola Cabs Cuts 10% Workforce, CEO Hemant Bakshi Steps Down

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Three points you will get to know in this article:

  • Ola Cabs laid off employees for IPO plans, impacting all departments.
  • Bhavish Aggarwal startup plans $500 Mn IPO.
  • Aggarwal replaces Bakshi in startup operations.

Restructuring Initiative and Workforce Reduction

Ola Cabs, led by Bhavish Aggarwal, a prominent player in the ride-hailing industry, has recently undertaken a restructuring initiative resulting in the reduction of approximately 10% of its workforce, equating to roughly 200 employees. Moreover, Hemant Bakshi, the CEO who recently joined the startup, has stepped down from his position. These layoffs were part of the company’s strategic preparations for its IPO. The impact was felt across various departments within the organization.

TechCrunch reported that Aggarwal reached out to the team via email, detailing the company’s plans for a restructuring aimed at boosting profitability. He highlighted Ola Cabs’ substantial investments in artificial intelligence (AI), which have yielded considerable cost advantages.

In his message, Aggarwal emphasized a commitment to leveraging these investments to pioneer cutting-edge products and services across all facets of the business. However, he also acknowledged that these strategic shifts would lead to certain positions within the company becoming redundant.

Ola Cabs' IPO Plans and Draft Red Herring Prospectus (DRHP) Submission

Earlier this month, news surfaced that the startup is back in gear for its debut on the stock market, eyeing a $500 million initial public offering (IPO). Within the next three months, they aim to submit their draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI).

Rumor has it, the startup is deep in talks with top investment banks like Bank of America, Goldman Sachs, Citi, Kotak, and Axis to orchestrate their grand entrance into the public market.

Leadership Transition and Strategic Responsibilities

According to sources familiar with the matter, Aggarwal is set to take charge of the startup’s daily activities after Bakshi’s departure. Additionally, he will maintain his roles as the chairman and managing director of Ola Cabs.

Prior to his tenure at Ola Cabs, Bakshi accumulated 15 years of experience at Unilever, a prominent FMCG company. The startup officially welcomed Bakshi aboard in January of this year.

Established in 2010, Ola Cabs vies for market share alongside giants like Uber and BluSmart in India’s ride-hailing arena.

Before its recent restructuring efforts, the company underwent two rounds of layoffs within the past two years. In January of the preceding year, it parted ways with 200 employees across its branches including Ola Cabs, Ola Electric, and Ola Financial Services.

Financial Resilience and Growth

In September 2022, ANI Technologies, Ola Cabs’ parent company, made the difficult decision to let go of approximately 200 employees from its software engineering division.

In the fiscal year FY23, ANI Technologies saw a significant improvement in its financials, with its consolidated net loss nearly halving to INR 772.2 Cr from INR 1,522.3 Cr in the previous year. This positive trend was complemented by a robust 42% increase in operating revenue, which soared to INR 2,799.3 Cr from INR 1,970.4 Cr in FY22.

Market Optimization and Focus on Indian Operations

On another front, Ola Cabs announced a milestone achievement, revealing that its India mobility business achieved profitability in FY23. The company reported a ‘segment-adjusted’ EBITDA of approximately INR 250 Cr, marking a substantial turnaround from an EBITDA loss of INR 66 Cr in the preceding fiscal year. Moreover, Ola’s India mobility arm experienced a remarkable 58% surge in revenue, reaching INR 2,135 Cr for the fiscal year ending in March 2023.

In a strategic move aimed at optimizing its operations and preparing for a potential public listing, Ola Cabs made the decision to streamline its focus on the Indian market. As part of this strategy, the company recently ceased its operations in the UK, New Zealand, and Australia. This refocusing underscores Ola’s commitment to consolidating its efforts and resources in its home market.

Ola Cabs, under the leadership of Bhavish Aggarwal, executed a strategic workforce reduction and witnessed the departure of CEO Hemant Bakshi, aligning with preparations for its imminent IPO. The company’s substantial investments in artificial intelligence (AI) yielded cost advantages and paved the way for cutting-edge products and services. At the same time, Ola Cabs geared up for its $500 million IPO, engaged with top investment banks, and saw Aggarwal taking on more strategic responsibilities. Financially, the company displayed resilience and growth, achieving profitability in its India mobility segment. Ola’s strategic shift also involved focusing on Indian operations, ceasing activities in select international markets to consolidate its efforts.

Manvendra Hada

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