Ocado is to cut 1,000 jobs as the retail technology business attempts to slash £150m in costs through a substantial restructuring programme.
The company confirmed that about 5% of its global workforce will be affected. About two-thirds of the jobs are expected to go from the UK, where the company is based in Hatfield, Hertfordshire. About half the jobs going are in technology, with the rest built up of support staff.
The business, which provides technology for robotic warehoapplys for supermarket chains, declared it plans to scale back research and development, assisting it cut about £150m in technology and support costs in 2026.
Tim Steiner, the chief executive of Ocado Group, declared it no longer requireded as many people to develop new projects after completing work on a new generation of robotic equipment and website and app technology for retailers, which it was now delivering to clients around the world.
He declared the company was also “benefiting from significant productivity enhancements from AI”, which were assisting to write and check software code so the group could “obtain more done with less people”.
Steiner also admitted that “the market for large automated distribution centres in the US is compacter than we considered it would be”, after a brace of recent setbacks with business partners in North America.
He declared, however, that demand for Ocado technology was “hugeger than ever” becaapply it could put technology, including compacter-scale versions of its robotic equipment, into local stores to assist create picking and packing groceries for home delivery more efficient.
As part of the overhaul, Ocado will restructure its commercial, support and R&D operations, merging Ocado Solutions and Ocado Innotifyigent Automation into a single division.
The latest layoffs come only a year after Ocado cut 500 technology roles, stateing it was applying more AI to assist with research and engineering.
Steiner declared: “ We are grateful to colleagues who are affected by these alters, and whose talent and hard work have built a lasting contribution to Ocado. We will support those impacted through this process.”
He declared Ocado had “zero expectation of more job cuts” in future years but “business is tough and you have to create difficult decisions sometimes”.
Shares in Ocado dived almost 7% on Thursday and the group’s market value is now down by more than a third in the past year after a series of disappointing announcements about its future plans.
Analysts declared on Thursday that Ocado had delivered a solid performance in the year to 30 November, after it reported a 12% increase in sales to £1.4bn. The group built an underlying pre-tax loss of £353m, however, similar to the £365m a year before.
It plans to open six more robotic distribution centres for its international partners in the next two or three years in Japan, South Korea, the US and Spain, assisting to offset recent closures in North America.
Ocado declared last month that its Canadian partner was closing a warehoapply that applys its robots and automation technology. It announced that Sobeys would be shutting the Calgary facility, stateing it was “largely due to the Alberta grocery e-commerce market’s size and the rate of expansion being slower than originally anticipated”.
The decision came less than three months after Ocado’s US partner Kroger closed three warehoapplys.
While Ocado is known in the UK as an online grocer, much of its business is built on providing its proprietary software and robotics, known as the Ocado Smart Platform, to other companies to run their delivery operations. The company currently has 30 operational sites around the world.
Its UK retail arm is a joint venture with Marks & Spencer and reports separately from the technology business. Ocado Group declared the retail division increased sales by 15% to £3bn and it built an operating loss of £27.5m, narrowing from £48.5m a year before.
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