17/08/2016 9:56 AM IST | Updated 17/08/2016 5:30 PM IST

Ola Is Shutting TaxiForSure, Laying Off Up To 1,000 Employees: Report

Resource crunch

Bikas Das/AP

Cab services company Ola is winding down its TaxiForSure division, less than two years after it bought the company for $200 million because of resource crunch, according to a report by VCCircle which cited sources.

TaxiForSure employs an estimated 1,300 people and the bulk of layoffs are happening at the company's customer service operations such as call centres, driver relations and business development units spread across at least a dozen cities, according to the report.

Following the acquisition of TaxiForSure, Ola had integrated only parts of the two businesses such as technology and human resource teams.

In an e-mailed statement, Ola said TaxiForSure was integrated into Ola to help launch Ola Micro and during the course of the integration, it absorbed as many TFS employees for open roles at Ola. The company is also offering "enhanced severance benefits and outplacement services" to help affected employees, the statement added. An Ola spokesperson declined to comment further on the affected roles.

Ola is backed by SoftBank Group and Didi Chuxing, which is buying Uber's China business for $35 billion, a deal expected to result in increased competition between Ola and Uber in India.

Didi is a strategic investor in Ola, which raised about $500 million from Didi, SoftBank among others late last year.

Competition has been fierce for Ola and Uber in India that have been battling it out on the apps, fares, blogs and courtrooms. India remains a key market for Uber. Last month, Uber raised $3.5 billion from a Saudi fund, with plans to invest a huge portion of that in its India operations.

The fight between Ola and Uber even spilled over to blog wars recently with executives from the two accusing each other on who might be doing more nation-building in India.