Ocado Group is preparing to cut 1,000 jobs over the next year as it accelerates a cost-cutting drive aimed at stabilising finances and restoring investor confidence.
The reductions, equivalent to around 5 per cent of its global workforce , will fall heavily on the UK, with roughly two-thirds of the affected roles based domestically. Most of the cuts are expected at the company’s headquarters in Hatfield, Hertfordshire, and will largely impact technology and support functions.
The announcement came alongside Ocado’s full-year results, which revealed widening losses despite revenue growth.
Chief executive Tim Steiner said a “significant number” of roles would no longer be required as part of a broader restructuring to align the business with a lower cost base.
“These changes reflect the lower structural cost base that we have signalled over recent years,” Steiner said. “Regrettably, this means a significant number of roles will no longer be required. We will support those impacted through this process.”
Ocado said the measures are expected to generate annual cost savings of approximately £150 million.
The group employs around 20,000 people worldwide, the majority in the UK. The job losses follow several years of strategic recalibration as the company grapples with underperformance in its international technology partnerships.
For the year to 30 November, Ocado reported group revenues of £1.36 billion, up 12 per cent year-on-year. However, pre-tax losses at continuing operations widened to £377.6 million, compared with a £339.8 million loss the previous year.
The company has been under mounting pressure after setbacks in North America. US grocery chain Kroger confirmed it would close three automated customer fulfilment centres operated by Ocado after sales fell short of expectations. In January, Canadian retailer Sobeys announced the closure of its Calgary facility.
These developments have shaken confidence in Ocado’s technology-led global expansion model, which had once positioned the company as a disruptive force in grocery logistics.
By midday trading, Ocado shares had fallen more than 7 per cent, extending a sharp decline over the past 12 months.
Chris Beauchamp, chief market analyst at IG, said Ocado’s early-mover advantage in grocery delivery had eroded as established supermarket chains developed in-house technology.
“For a company once seen as the future of supermarket delivery, its fate has been overtaken by its more pedestrian, but larger, rivals,” he said.
“Rather than use Ocado’s technology, they have instead built their own and simply bypassed the newcomer, leaving Ocado as the great white elephant that failed to deliver.”
Traditional supermarket operators have increasingly invested in their own distribution infrastructure, leveraging scale and existing store networks rather than outsourcing to Ocado’s robotics-led model.
The scale of the job losses has prompted concern in Hatfield, where Ocado’s headquarters has been a significant local employer.
Andrew Lewin, Labour MP for Hatfield, described the cuts as “a serious setback”.
“Hatfield has been Ocado’s HQ for many years and people from our community have been integral to the growth and success of the business,” he said. “Ocado’s decision to cut hundreds of local jobs will hit hard.”
The announcement underscores broader pressures in the UK retail and grocery sector, where businesses are facing rising operating costs, technological change and cautious consumer spending.
Separately, Sainsbury’s confirmed that up to 300 roles are at risk as it restructures its technology and data divisions across its supermarket and Argos operations.
Ocado, which operates its own online grocery joint venture with Marks & Spencer alongside its technology licensing arm, now faces the challenge of proving that its capital-intensive robotics model can deliver sustainable returns in a more competitive and cost-sensitive environment.
The coming year will test whether aggressive cost discipline and restructuring can reposition the company for profitability — or whether further retrenchment lies ahead.
