Ola Cabs CEO Hemant Bakshi who served for just four months, has resigned from his position. Bakshi’s departure coincides with the company’s restructuring efforts, which will impact approximately 10% of its workforce – translating to around 200 employees.
Founder Bhavish Aggarwal will resume direct oversight of the company’s day-to-day operations following Bakshi’s exit.
Layoffs Amidst Restructuring
In a move aimed at restructuring ahead of its planned initial public offering (IPO), Ola Cabs has laid off approximately 10% of its workforce, impacting close to 200 employees.
The restructuring is part of the company’s efforts to streamline operations and improve profitability. Founder Bhavish Aggarwal stated, “The restructuring exercise is aimed at improving profitability and preparing the company for the next phase of growth.”
The restructuring aims to bolster profitability and position Ola for sustained growth. Aggarwal emphasized the company’s commitment to serving India’s vast population and driving efficiency across its operations. Ola has invested significantly in artificial intelligence and technology, resulting in notable cost advantages. However, these changes will render certain roles redundant, necessitating layoffs.
CEO of Ola Cabs, Hemant Bakshi Steps Down
Hemant Bakshi, who served as the chief executive officer of Ola Cabs, has resigned from his position after just four months. His departure aligns with the company’s broader restructuring efforts.
Bhavish Aggarwal, founder and chairman of Ola Cabs, commented on Bakshi’s resignation, saying, “Hemant will be stepping down from his role as CEO to pursue opportunities outside the company. We extend our gratitude to Hemant for his contributions and wish him the best in his future endeavors.”
With Bakshi’s exit, Bhavish Aggarwal will once again take over the reins of the company, overseeing its day-to-day operations. The restructuring also involves a realignment of roles within the organization. While the support teams have been primarily affected by the layoffs, the core technology and product teams remain intact.
Preparing for IPO
Ola Cabs is gearing up to file a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for its IPO. The company aims to raise $500 million, valuing the firm at approximately $5 billion. Ola Electric, a subsidiary, has already initiated the IPO process, seeking to raise around ₹7,250 crore.
Financial Performance and Strategic Focus
Despite challenges, Ola Cabs showcased promising financial results in FY23. The company reported a revenue of ₹2,135 crore, marking a substantial 58% increase from the previous fiscal year. Notably, Ola achieved positive earnings before interest, taxes, depreciation, and amortization (EBITDA) of ₹250 crore, a significant turnaround from the EBITDA loss of ₹66 crore in FY22.
Exiting International Markets
The CEO quit and layoffs comes after Ola’s decision to exit international markets such as the UK, Australia, and New Zealand underscores its renewed focus on the Indian market and the expansion of its electric vehicle (EV) fleet. The company believes that the Indian ride-hailing business presents lucrative opportunities for growth and profitability. Additionally, Ola is exploring various strategies to redefine mobility and enhance its offerings, including premiumization, electrification, and diversification into financial services, logistics, and e-commerce.
