UK Supermarket Eliminates 1,000 Jobs to Save £150 Million
Ocado Group Plc is set to eliminate around 1,000 jobs as part of a significant cost-cutting initiative aimed at saving £150 million. This decision represents approximately 5% of its global workforce and is mainly concentrated in its UK operations.
Details of Job Cuts
The job reductions will primarily impact employees at Ocado’s headquarters in Hatfield, Hertfordshire. The company has announced restructuring plans that include a merger of its Ocado Solutions and Ocado Intelligent Automation divisions.
Management Statements
Tim Steiner, the chief executive, expressed regret over the job losses, acknowledging the contributions of affected employees. Ocado is committed to supporting these individuals during the transition.
Restructuring and Financial Goals
As part of its strategy, Ocado plans to decrease expenditures related to research and development. The target is to cut technology and support costs from around £290 million in 2024 to £60 million by 2027.
- Cost reductions aim to save £150 million.
- Approx. 1,000 jobs to be eliminated, 5% of the workforce.
- Majority of cuts will occur at the UK headquarters.
This restructuring follows Ocado’s previous year announcement regarding workforce reductions in R&D, having spent over £800 million in this sector in the last four years. The company’s shift towards new technologies is also a crucial factor in this decision.
Impact of Market Changes
Ocado’s financial performance has recently faced challenges following the closure of several warehouses operated for its grocery partners in the United States. Notably, Sobeys, a Canadian supermarket, has closed its fulfillment center in Calgary, shortly after Kroger, a US grocery chain, ended operations at three Ocado-run warehouses.
Current Operations
Despite these setbacks, Ocado continues to manage logistics for Kroger at five operational sites and supports Sobeys through two warehouses dedicated to online services. The Hertfordshire-based company specializes in automation technology that assists retailers in efficiently managing online food orders from their large robotic warehouses.
Ocado also maintains a joint venture in the UK with Marks & Spencer, reinforcing its position in the online grocery market.
