Ocado to axe 1,000 jobs in cost-cutting drive

Ocado Group is planning 1,000 job cuts, about 5% of its global workforce, over the coming year as it seeks to cut costs.

Tim Steiner, the boss of the technology and online grocery group, said a "significant number" of roles would no longer be needed as part of a restructuring.

Ocado employs about 20,000 people worldwide, with the vast majority in the UK. About two-thirds of the job cuts will be in the UK, with most coming at its headquarters in Hatfield, Hertfordshire.

The company provides technology to supermarket distribution centres, as well as running an online grocery business with Marks & Spencer. The job cuts are expected to come largely in tech and support teams.

Ocado said the actions it was taking were expected to cut costs by about £150m.

Chris Beauchamp, chief market analyst at IG, suggested Ocado had lost the advantages of being one of the first in the grocery delivery market.

"For a company once seen as the future of supermarket delivery, its fate has been overtaken by its more pedestrian, but larger, rivals, utilising their size and reach and building on their existing business to tell a much more compelling story for investors.

"Rather than use Ocado's technology, they have instead built their own and simply bypassed the newcomer, leaving Ocado as the great white elephant that failed to deliver," he said.

By midday, Ocado shares had fallen by more than 7%.

The firm's shares have sharply fallen over the past year after both of its partners in North America said they would close centres run by the company after demand failed to meet expectations.

US grocery chain Kroger is shutting three Ocado-run warehouses, while in January Canadian chain Sobeys said it was closing a centre in Calgary.

News of the job cuts came as Ocado reported its full year results. The company said group revenues had risen by 12% to £1.36bn in the year to 30 November.

However, pre-tax losses at its continuing operations widened to £377.6m, compared with a loss of £339.8m in the previous year.

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.

"We will support those impacted through this process," he added.

The MP for Hatfield, Labour's Andrew Lewin, said it was "a serious setback".

"Hatfield has been Ocado's HQ for many years and people from our community have been integral to the growth and success of the business," he said.

"Ocado's decision to cut hundreds of local jobs will hit hard," Lewin added, saying staff were facing uncertainty over their future.

Separately, Sainsbury's said that up to 300 jobs were at risk in its supermarket and Argos businesses due to a restructuring of its technology and data division.

The revamp will see the company create one dedicated team for Argos and two for Sainsbury's.