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Ola Electric has recently laid off more than 1,000 employees as part of cost-cutting measures. The layoffs came across departments, including purchasing, customer relations, supply and charging infrastructure.
The company has been facing major challenges in the recent past due to excessive competition in the field and customer complaints owing to alleged poor service. Ola Electric is facing competition from established players such as Bajaj, Honda and TVS who have the financial muscle to tide over the market challenges.
Though the company's operations, including the Giga factory in Tamil Nadu, are functioning normally the challenges persist. Besides, the frequent layoffs made it tough for them to acquire fresh talent.
Experts point out that the 'hire and fire' policy of the company will hamper growth. According to an expert, if a company is firing employees regularly, people will be reluctant to join it because of this negative perception.
“For a new entrant like Ola Electric, efforts should have gone into improving its service in terms of quality and reach. Even if you have a good quality product and the service is poor there is a remote chance that it will do well in the market. Companies such as Bajaj and TVS have reach and their service centres can be found in every nook and corner of the country. For Ola Electric, it would be a while before its service quality and reach improves,” said B.S. Murthy, CEO of HR firm Leadership Capital.
So what does the future hold for Ola Electric? Will it continue to grow or keep laying off people on a regular basis? HR experts say that the company should realise should be cautious in its growth approach and should move ahead carefully. The company cannot merely rely on technology to succeed, but should also ensure employee-friendly HR practices.
Rather than firing the company should aim to retain talent. “Take the case of Ather, Ola's competitor. It is not facing the kind of growth challenges that Ola Electric is facing currently. This is because Ather has followed a cautious growth path. Ather received far less funding when compared to Ola Electric. There is n new innovation in electric two-wheelers as most of them have been tested by the Chinese and they are all set for the next Ten years,” added Murthy.
"In the EV two-wheeler segment, there is a lot of competition and though Ola Electric has had a first mover advantage needs to fix the service issues as well. The overall investment climate is also grim and the investors also expect a lot from a company where they have invested. Ola Electric is still not profitable though they have a large R&D team and needs to keep costs under control; hence there is pressure on the company. Being the first mover in the market the expectations are also very high from the customers and hence if the service is not up to the mark the brand gets a hit, thereby affecting its profitability and growth," Aditya Narayan Mishra, CEO and MD CIEL HR, said.
"Despite the first mover advantage with the largest market share in the country Ola Electric is now facing stiff competition from major players who have been in the two-wheeler and scooter segment for decades such as TVS, Bajaj and Honda. Ola wants to have a Tesla-like model in India which may not work in the long run. For instance, one can order online and get delivery without having physical stores. This may not work in India, especially in rural areas. Ola Electric will need to come up with a new strategy to be on the growth path," Founder of KayEss Square Consulting Sathya Pramod said.
In the current circumstances, Ola Electric should re-strategize its HR policies which should aim at retaining talent and making them more skilled. Firings should stop so that talented individuals develop confidence in the company. New hiring could be slow and should wait until Ola Electric is back on its growth track again and customers develop confidence in its service. If done successfully, Ola Electric is likely to be back on track in the next couple of years.
