Ocado is preparing plans that could see up to 1,000 jobs cut as part of a renewed effort to rein in costs, following a difficult year for its automated warehouse technology business.
Up to 5 per cent of the group’s global workforce could be affected, according to people familiar with the discussions, although talks remain at an early stage and no final decision has been taken. An announcement could come as soon as this month.
The majority of redundancies are expected to fall at Ocado’s UK head office, with technology roles likely to be among those affected alongside back-office functions such as legal, finance and human resources.
The proposed cuts come ahead of Ocado’s full-year results on 26 February, after the group reiterated last month that it was targeting positive cashflow in the next financial year, “underpinned by rigorous cost and capital discipline”.
Last year, Ocado said it would cut around 500 roles in technology and finance as it scaled back research and development spending. That followed around 1,000 redundancies across the group in 2023 and 2024.
Founded in 2000 by three former Goldman Sachs bankers, Ocado has built its business around selling robot-operated warehouse systems to global grocery chains, alongside its online grocery joint venture with Marks & Spencer.
However, investor confidence has been shaken after two major North American partners announced plans to close a number of Ocado’s automated warehouses, known as customer fulfilment centres (CFCs), citing concerns over costs and efficiency.
Shares in the FTSE 250 group have fallen by almost a third over the past year. In November, US supermarket giant Kroger said it would close three CFCs, a move that briefly pushed Ocado’s share price back towards the 180p level at which it floated in 2010.
That was followed late last month by Sobeys, which announced plans to shut a CFC in Calgary, Alberta, pointing to slower-than-expected growth in online grocery shopping and the limited size of the regional market.
Although Ocado is set to receive hundreds of millions of pounds in compensation linked to the closures, analysts have warned that the setbacks could undermine its ability to secure new international partnerships. Mutual exclusivity agreements with most retail partners expired in December, raising questions about the long-term pipeline for its technology.
Tim Steiner, Ocado’s founder and chief executive, has previously described the company as the “Tesla of grocery”. Despite its technological ambitions, the group has yet to turn a profit. Pre-tax losses narrowed slightly last year to £374.5 million, from £393.6 million in 2024.
In a statement, Ocado said: “We regularly review our operations to ensure we’re set up for long-term success. If and when decisions are made that affect our people, we are committed to communicating with them directly and ensuring they are supported throughout.”
The coming weeks are likely to be closely watched by investors and staff alike as Ocado seeks to stabilise its business and prove it can translate cutting-edge automation into sustainable financial returns.