Ocado axes 1,000 jobs as targets PS150 million cost savings by 2027
Ocado Group PLC on Thursday said it is cutting 1,000 jobs as it scales back research & development investment and simplifies its operating model.
‘Following a period of rapid growth and capital investment in our technology, we believe now is
the appropriate time to realign and restructure our commercial, support and R&D functions,’ the Hatfield, Hertfordshire-based grocer and warehouse technology firm said in a statement.
Ocado added that after a ‘very significant phase of investment in our robotics and automation capabilities,’ it expects Technology and Support costs to continue reducing.
In addition, the firm said it reshaping parts of its organisation and simplify its operating model as ‘we re-engage in multiple international markets, following the end of exclusivity arrangements.’
This will see the consolidation of commercial brands Ocado Solutions and Ocado Intelligent Automation into a single organisation.
Chief Executive Tim Steiner said the changes being made would ‘reflect the lower structural cost base that we have signalled over recent years’.
‘Regrettably, this means a significant number of roles will no longer be required,’ he added.
In aggregate, Ocado expects these actions to reduce total cash costs across Technology and Support in financial 2027 by around £150 million compared to financial 2025.
Ocado said the moves will place the firm ‘on the right footing to grow and thrive in the coming years.’
The news came as Ocado said pretax profit in the financial year to November 30 amounted to £402.9 million, swinging from a loss of £352.8 million.
Revenue climbed 12% to £1.36 billion from £1.21 billion. A £756.0 million boost from adjusting items, compared to only a £12.4 million lift the year prior, improved its bottom line.
Ocado booked a £782.6 million gain on the statutory valuation of its investment in Ocado Retail, where it partners with Marks & Spencer.
Looking ahead, Ocado said it expects to turn cash flow positive during second half of financial 2026 with full year underlying cash outflow excluding closure fees to be around GBP?200 million.
However, analysts at JPMorgan noted this compared to its forecast for an outflow of just £102 million.
In addition, Ocado said 6 customer fulfillment centres will go live over the next 2 to 3 years.
Shares in Ocado fell 8.3% to 215.60 pence each in London on Thursday morning.
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