Ocado is understood to be cutting as many as 1,000 positions in a fresh round of job losses, representing approximately five per cent of its workforce worldwide.
The British grocery technology company is pursuing renewed efforts to reduce costs after enduring a particularly difficult twelve months for its automated warehouse operations.
Discussions remain at an early stage and no definitive decision has been reached, according to sources familiar with the matter.
The potential cuts come as the FTSE 250 firm seeks to achieve positive cashflow in the coming financial year through what it has described as “rigorous cost and capital discipline”.
Ocado is understood to be preparing 1,000 job cuts
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The redundancies are expected to fall predominantly on staff based at the company’s UK headquarters.
Technology workers are likely to bear the brunt of the cuts, alongside employees in back-office functions such as legal, finance, and human resources departments.
Sources indicate that an announcement regarding the job losses could arrive as early as this month.
The timing would place any confirmation ahead of Ocado’s annual results, scheduled for February 26.
A 1kg tub comes in at £9 on Ocado | PA
Supermarkets have struggled to navigate the cost of living crisis
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gbnewsLast month, the company reiterated its commitment to achieving positive cashflow during the next financial year, a target it said would be supported by strict management of both costs and capital expenditure.
The company’s share price has tumbled by almost a third over the past year following setbacks with major North American clients.
In November, American supermarket giant Kroger revealed it would close three of Ocado’s automated customer fulfilment centres, citing worries about costs and efficiency.
That announcement briefly pushed shares close to the 180p level at which the company floated in 2010.
High streets have been hit by a wave of closures since the pandemic | PACanadian retailer Sobeys delivered a further blow late last month, announcing the unexpected closure of a facility in Calgary due to disappointing growth and limited demand for online groceries in the region.
Analysts have expressed concern that these difficulties may hamper Ocado’s ability to secure new retail partnerships.
Ocado was established in 2000 by three former Goldman Sachs bankers and has built its business around selling sophisticated robotic warehouse systems to major supermarkets globally, while also operating an online grocery joint venture with Marks & Spencer.
Despite founding chief executive Tim Steiner once describing the company as the “Tesla of grocery”, it has never turned a profit. Pre-tax losses stood at £374.5million in 2024, a modest improvement from £393.6million the previous year.
The latest potential cuts follow 500 technology and finance redundancies announced last year and 1,000 group-wide job losses in 2023-24. Ocado stated: “If and when decisions are made that affect our people, we are committed to communicating with them directly and ensuring they are supported throughout.”
