British technology company Ocado Group has announced the layoff of approximately one thousand employees, representing about 5% of its global workforce. Two-thirds of the job reductions will affect operations in the United Kingdom, primarily at its headquarters in Hatfield, Hertfordshire. The restructuring, which involves merging two key divisions and reducing research and development spending, is expected to deliver savings of around £150 million in 2026. Concurrently, Tesco announced a separate reorganization at its head office, which will also result in layoffs but also new hires.

Reduction of a Thousand Positions

Ocado Group plans to lay off approximately one thousand employees, corresponding to about 5% of its global workforce estimated at around 20,000 people. Most of the layoffs in the United Kingdom will concern the company's headquarters in Hatfield. The decision is part of a broader restructuring and cost-cutting effort.

£150 Million Savings Plan

The main goal of the announced changes is to reduce costs by approximately £150 million in 2026. The savings are to be achieved by limiting research and development (R&D) investments, increasing efficiency through artificial intelligence, and tightening cost discipline in the technology and support areas.

Department Consolidation and New Structure

As part of the restructuring, Ocado will merge two key segments – Ocado Solutions and Ocado Intelligent Automation – into one unified division. The regrouping will also include commercial, support, and research and development operations. The company declares that these changes reflect a lower, more efficient underlying cost structure.

Background of Share Decline and Partner Issues

Ocado shares fell by 27% over the past year after its North American partners – Kroger in the USA and Sobeys in Canada – announced the closure of automated customer fulfillment centers. These decisions, motivated by weaker-than-expected demand, fueled doubts about the company's business model outside dense urban areas.

Parallel Restructuring at Tesco

Separate from Ocado's actions, supermarket chain Tesco announced its own reorganization at its head office in Welwyn Garden City, Hertfordshire. As part of this, 180 positions will be eliminated, but 250 new ones will be created. The changes aim to support dynamically growing online platforms, quick commerce, and personalization services.

British technology company Ocado Group, specializing in warehouse automation for supermarket chains and operating its own online retail business through a joint venture with Marks & Spencer, has announced a wide-ranging restructuring. The plan includes laying off approximately one thousand employees worldwide, representing about 5% of its global workforce, estimated at 20,000 people. According to sources, about two-thirds of the reductions will affect operations in the United Kingdom, with the majority of affected employees based at the company's headquarters in Hatfield, Hertfordshire. Ocado's CEO, Tim Steiner, described the decision as "regretful" and assured support for departing employees. The overarching goal of these measures is to reduce costs by approximately £150 million in 2026. The savings are to be achieved primarily by cutting research and development expenditure and implementing "AI efficiency" and stricter cost discipline in technology and support areas. The restructuring will also involve merging two key business units – Ocado Solutions, responsible for delivering technology to partners, and Ocado Intelligent Automation, focused on robotics – into one integrated division. The company's statement emphasized that the changes reflect the need to adapt to a "lower structural cost base." The announcement of layoffs and savings comes in the context of difficulties Ocado faces in the international market. Over the past year, its share value has fallen by 27%.

Mentioned People

  • Tim Steiner — CEO of Ocado Group
  • Ken Murphy — Chief Executive Officer of Tesco