Ocado Group Plc, the British technology company specializing in automated grocery warehouses, announced plans to cut around 500 jobs, representing about 2.5% of its global workforce, Bloomberg reports.
The move comes as the company faces a challenging outlook for its core business and aims to reduce costs.
The layoffs were announced to staff in a message from Chief Executive Officer Tim Steiner. The job cuts are part of a broader cost-cutting initiative that will also see Ocado reduce investment in research and development to align with its current growth trajectory.
“This means making some very difficult decisions, including reducing our cost base and the size of our headcount,” Steiner said in the message. The majority of the cuts will affect the technology division, with some finance staff also impacted. Ocado currently employs around 20,000 people globally.
The decision to reduce headcount reflects Ocado’s struggles to convince investors about the viability of its capital-intensive robot technology. Recent financial performance and revised growth forecasts have contributed to investor concerns.
The company’s shares plummeted after it reported a worse-than-expected pretax loss and announced that its technology unit will add only five modules, or installations, this year, compared with 12 in 2024.
Ocado, which also operates an online grocery delivery joint venture with Marks & Spencer Group Plc, reported a pretax loss of £374 million ($474 million) for the past year. While an improvement from 2023, the loss exceeded analysts’ predictions of £340 million.
Following the announcement, Ocado’s shares experienced a sharp decline, falling as much as 19% in London trading, the most significant drop since September 2023. The company’s shares are down more than 30% over the past 12 months.
