OCADO will cut about 1,000 jobs as part of a cost-saving plan aimed at helping the group turn cash-flow positive this year.
The London-listed technology and online grocery company said the cuts are part of a plan to reduce technology and support costs by 150 million pounds in its 2025/26 financial year. Ocado supplies automated technology for distribution centres and runs a UK online grocery joint venture with Marks & Spencer.
"It's about 1,000 people, it's less than 5 per cent of our global workforce. About two thirds of those jobs are in the UK, about half of the jobs are from our R&D team," CEO Tim Steiner told Reuters on Thursday.
The company’s shares have fallen 36 per cent over the last year. This followed announcements by its North American partners, Kroger in the US and Sobeys in Canada, that they would close robotic customer fulfilment centres, citing weaker-than-expected demand.
The developments have raised questions about Ocado’s business model, especially for partners operating beyond dense urban areas.
Ocado said the expiry of exclusivity agreements in most overseas markets, including the US, allows it to look for new partners. Analysts, however, question whether the group can secure new deals, given issues with current partners and a broader industry shift towards fulfilling online orders from stores.
The group said it expects to turn cash-flow positive in the second half of its 2025/26 year. It forecast a full-year underlying cash outflow, excluding closure fees, of about 200 million pounds.
Ocado expects to be full-year cash-flow positive in 2026/27.
For the year ended November 30, the company reported a 59 per cent rise in underlying earnings to 178 million pounds. Revenue increased 12.1 per cent to 1.36 billion pounds.
(With inputs from Reuters)
