Ocado axing around 1,000 workers amid cost-cutting overhaul

Around 1,000 jobs are being axed at Ocado as the retail technology firm looks to slash costs by about £150 million as part of a wider restructure.

The group confirmed around 5% of its global workforce is being cut, with about two thirds of the job losses impacting its UK operations.

Most of the cuts will affect staff at the firm’s headquarters in Hatfield, Hertfordshire.

The business, which runs robotic warehouses for supermarket chains, said it plans to scale back research and development (R&D), helping it trim around £150 million in technology and support costs in 2026.

The group also said it will restructure its commercial, support and R&D operations, which will see Ocado Solutions and Ocado Intelligent Automation merged into a single division.

Ocado chief executive Tim Steiner said: “Regrettably, this means a significant number of roles will no longer be required.

“We are grateful to colleagues who are affected by these changes, and whose talent and hard work have made a lasting contribution to Ocado.

“We will support those impacted through this process.”

Ocado also runs a UK online grocery firm as a joint venture with Marks & Spencer, but confirmed this is not impacted by the restructure.

The group, which employs just over 20,000 staff globally, said it was also focusing efforts largely on the grocery market for future contracts, though it will continue with its existing clients in non-grocery sectors.

The business unveiled plans nearly a year ago to scale back its R&D workforce in the UK, having spent more than £800 million in this area over the previous four years.

Mr Steiner said: “We have largely completed a very significant phase of investment in our robotics and automation capabilities.

“As that development cycle concludes and we accelerate deployment of our latest products, we expect aggregate technology and support costs to continue reducing.

“Our ongoing R&D investment will be concentrated on areas where we see the clearest path to value creation for Ocado and our partners.

“We are also reshaping parts of our organisation to focus our commercial strategy and simplify our operating model as we re-engage in multiple international markets, following the end of exclusivity arrangements.”

Details of the cuts came as Ocado reported widened pre-tax losses from continuing operations of £377.6 million for the year to November 30, against losses of £339.8 million the previous year.

On a bottom line basis, it swung to a £395.2 million profit from losses of £374.3 million the previous year thanks to a £782.6 million gain in the value of its share in Ocado Retail.

Shares in FTSE 250-listed Ocado fell 11% in Thursday morning trading, having dropped significantly in recent months after it announced the closure of warehouses run with its grocery partners in the US and Canada.

Canadian supermarket chain Sobeys said it was closing its fulfilment centre in the Canadian city of Calgary, two months after US grocery chain Kroger decided to shut three Ocado-run warehouses and scrapped plans for new sites.

Ocado continues to operate five sites for Kroger and supports its logistics operations, and Sobeys uses two warehouses to support its online business.