Ocado Confirms 1000 Job Cuts Amid Cost Reduction Strategy

Ocado has announced plans for a significant restructuring that will result in approximately 1000 job losses, as the British supermarket technology group seeks a substantial reduction in its cost base. This move aims to align the company’s operations with its focus on profitable growth, with expectations that these measures will lead to cost savings of around £150 million by 2027. The job reductions are anticipated to lower the global workforce by about 5 per cent, with roughly two-thirds of the cuts occurring in the UK, primarily at its headquarters in Hatfield.

Founded in 2000 by three former Goldman Sachs bankers, Ocado enjoyed rapid growth during the pandemic, fuelled by a surge in online shopping and an increased interest in its robotic warehouse technology. Despite these initial successes, the company’s shares have experienced a dramatic decline of 90 per cent over the last five years. This reduction has seen its market capitalisation plummet from a peak of £22 billion in 2021 to below £2 billion prior to the recent announcement of its annual results.

Ocado’s shares fell by 15 pence, or 6.4 per cent, closing at 220 pence after the company reported adjusted losses before tax totalling £353 million for the year ending 30 November 2025. This marked an improvement from a loss of £365.2 million in 2024, though it exceeded analysts’ forecasts of a £289 million loss. On a statutory basis, the company reported a profit of £395 million, up from a loss of £374 million the previous year. This figure includes a notable accounting gain derived from changes to how it accounts for its retail joint venture.

Group revenue exhibited a 12 per cent increase to £1.4 billion, which slightly surpassed market expectations. Revenue in the solutions division, responsible for licensing Ocado’s warehouse and logistics technology to retailers, rose by 13 per cent, while adjusted earnings before interest, taxation, depreciation and amortisation reached £140 million. The robotic warehouse operations also reported revenue growth of 11.5 per cent, amounting to £800.3 million. Ocado’s retail business performed well, achieving a revenue increase of 15.4 per cent to £3.1 billion, outpacing the wider UK grocery market.

Recently, major North American partners, including the US supermarket chain Kroger and Canada’s Sobeys, announced closures of several of Ocado’s robot-operated facilities, known as customer fulfilment centres. These decisions are coupled with a shift towards delivery services like DoorDash. While Ocado will receive compensation for these closures, the situation has significantly hindered its aspirations to revolutionise the global supermarket sector with advanced technology.

Ocado’s CEO, Tim Steiner, stated that the company is reshaping various parts of its organisation as it re-engages in multiple international markets, after exclusivity agreements with retailers employing its technology expired last year. The restructuring reflects the lower structural cost base that has been signalled in recent years. Unfortunately, this means that a significant number of roles will no longer be needed. Steiner expressed gratitude to the impacted employees whose contributions have been invaluable to Ocado.

Market analysts have pointed out that Ocado’s reported profit of £395 million may be attributed to one-off accounting adjustments, raising concerns about the company’s future execution of its plans. While promises of cost-saving measures and targets for positive cash flow seem encouraging, investor confidence appears to be wavering amidst these uncertainties.