Ocado has announced plans to cut 1,000 jobs as part of a £150m cost-saving restructuring programme. The retail technology company confirmed that approximately 5% of its global workforce will be affected, with about two-thirds of the job losses occurring in the UK, where the company is based in Hatfield, Hertfordshire. Roughly half of the roles being cut are in technology, with the remainder comprising support staff.
The company, which provides robotic warehouse technology for supermarket chains, said it intends to scale back research and development, helping to reduce technology and support costs by about £150m in 2026. Chief executive Tim Steiner stated that Ocado no longer requires as many staff to develop new projects after completing work on a new generation of robotic equipment and website and app technology for retailers, which is now being delivered to clients globally.
Steiner also noted that the company is benefiting from significant productivity enhancements from artificial intelligence, which is helping to write and check software code, enabling the group to achieve more with fewer people. He admitted that the market for large automated distribution centres in the US is smaller than anticipated, following recent setbacks with business partners in North America. However, he said demand for Ocado technology is bigger than ever, particularly for smaller-scale versions of its robotic equipment for local stores.
As part of the overhaul, Ocado will restructure its commercial, support, and R&D operations, merging Ocado Solutions and Ocado Intelligent Automation into a single division. The latest layoffs come a year after Ocado cut 500 technology roles, citing increased use of AI. Steiner expressed gratitude to affected colleagues and said the company would support them through the process. He added that there is zero expectation of further job cuts in future years, but acknowledged that difficult decisions are sometimes necessary.
Shares in Ocado fell nearly 7% on Thursday, and the group's market value has dropped by more than a third over the past year following a series of disappointing announcements. Analysts noted that Ocado delivered a solid performance in the year to 30 November, with a 12% increase in sales to £1.4bn, but an underlying pre-tax loss of £353m, similar to the previous year. The company plans to open six more robotic distribution centres for international partners in Japan, South Korea, the US, and Spain over the next two to three years, offsetting recent closures in North America.
Ocado's UK retail arm, a joint venture with Marks & Spencer, reported a 15% increase in sales to £3bn and an operating loss of £27.5m, narrowing from £48.5m a year earlier.
