Ride-hailing major Ola is undertaking a major realignment of its various businesses, as the company looks at containing costs and become profitable before hitting the public market in FY21. According to sources in the know, this exercise would result in reduction of its workforce by around 300 people, which is roughly 5-8 per cent of its overall headcount.
“The plan is to go for initial public offering (IPO) in the next 12-18 months, and the process for that is expected to start towards the end of FY21. The company is of firm believe that the core mobility (cab-hailing) business would become profitable in FY20, and some of these initiatives are targeted towards achieving that,” said a person privy to the development.
In financial year ended March 31, 2019, Ola has cut down its losses significantly while reporting healthy jump in its revenue. According the documents filed with the Registrar of Companies (RoC) by the Bengaluru-based company, the losses for the period came down by almost 58 per cent, largely aided by a reduction in its employee benefits and other expenses. Employee benefits expenses in the financial year came down by 17 per cent to Rs 413.83 crore, indicating that the firm may have already started rationalisation of its workforce during last year.
According to the RoC document, which has been reviewed by Business Standard, Ola reported Rs 2,155.2 crore in revenues on standalone basis, which is growth of 16 per cent over FY18.
In response to a query, Ola said the company was putting a sharper focus on growth and profitability as it branches out to several new business verticals. “With a view to become more nimble and have a sharper focus on growth and profitability, we are redesigning the organisation to build a structure that strengthens and leverages our local and global scale and enables faster-decision making across all of Ola’s group companies,” the company said. “Our organisational redesign aims to right size all our operations as well as leverage skills sets and experience of mobility employees in available positions in new business verticals,” it added.
According to sources, the company is redeploying some of the impacted employees from Ola’s mobility business into other verticals wherever their skill set match with the required role.
The Bhavish Aggarwal-led firm over the past couple of years have branched out to several new verticals such as financial services, food, public transport technology as well as electric mobility. All these business are now in expansion mode, helmed by senior executives.
For example, Nitin Gupta, the co-founder of PayU India is now heading Ola Financial Services business as its CEO. Gupta had joined Ola two years ago. Puneet Bhirani who joined Ola in February is heading Ola Fleet Technologies as its CEO. Prior to joining Ola, Bhirani was the CEO of Digital Risk. Pranay Jivrajka, a founding member of Ola, is now heading its food business Foodpanda India as the CEO.
Even within the core mobility business, the India business is now headed by Arun Srinivasan, a former Partner of WestBridge Capital Partners, who in July had joined the company as its chief sales and marketing officer. Ola has recently given the charge of its international business to Simon Smith, who was previously heading only the Australia and New Zealand business.
- Realignment may impact around 300 employees
- Company preparing to go for an IPO by end of FY21
- Expects the core mobility business to be profitable in FY20
- Hopes overseas market to grow faster and profitably