Ola Fires CEO Hemant Bakshi, Cuts 180 Jobs in Restructuring for Profitability and Growth

Ola, the Indian ride-hailing startup, has let go of its chief executive, Hemant Bakshi, just four months after appointing him. The company is also cutting around 180 additional jobs as part of a 'restructuring exercise' aimed at improving profitability and preparing for the next phase of growth.

Ola's founder and chairman, Bhavish Aggarwal, cited investments in AI and technology as leading to significant cost advantages, and the company will continue to focus on these areas. Aggarwal expressed confidence in the company's strong leadership team and their ability to drive technology-led growth. He will take over as CEO until a new one is recruited.

The development comes as Ola was in preliminary discussions for an IPO. The company wants to show two quarters of profitability before filing for the IPO, which is expected to value the firm at $5 billion. Ola Electric has also filed draft papers for an IPO with SEBI in December and is awaiting its approval.

Why this matters: The restructuring at Ola reflects the challenges faced by ride-hailing companies in achieving profitability while also investing in new technologies. The outcome of Ola's IPO plans will be closely watched as a bellwether for the Indian startup ecosystem.

Earlier this month, Ola announced it was shutting down its global markets to focus on the Indian market. The company recently claimed that its India mobility business broke even with a 'segment-adjusted' EBITDA of about INR 250 crore in FY23, and its revenue jumped 58% year-on-year to INR 2,135 crore.

Aggarwal informed employees about the developments in a letter, stating: "We have made substantial investments in areas of AI and technology, which has led to significant cost advantages, and we will continue to focus on these areas to build innovative products and services." The restructuring is expected to impact at least 10% of Ola's workforce, as the company focuses on areas of AI and technology to build innovative products and services.

Key Takeaways

• Ola CEO Hemant Bakshi resigns after 4 months, 180 jobs cut in restructuring.
• Ola to focus on AI and technology, founder Bhavish Aggarwal to be interim CEO.
• Ola aims for 2 quarters of profitability before $5B IPO, Ola Electric files IPO draft.
• Restructuring reflects challenges for ride-hailing firms to achieve profitability.
• Ola claims India mobility business broke even, revenue jumped 58% in FY23.