Ocado set to cut 500 jobs and says 'decision hasn't been taken lightly'

Ocado is to cut hundreds jobs in its technology teams as part of the loss-making online grocery specialist’s efforts to reduce costs using artificial intelligence.

Ocado is set to cut 500 technology and finance jobs as artifical intelligence (AI) reduces costs. Ocado is to cut hundreds jobs in its technology teams as part of the loss-making online grocery specialist’s efforts to reduce costs using artificial intelligence.

The company, which employs 20,000 people, said AI had helped improve the productivity of its engineering team, enabling it to cut 500 roles across its technology and finance divisions. The group’s chief executive, Tim Steiner, said the planned cuts were “never something that’s easy or that we take lightly.”

He said: “It’s a very difficult day for us to have to announce that.” Steiner said: “We are taking advantage of AI-type tools that drive up the productivity of our engineering teams and are spending less going forward on research and development.”

Its share price fell by more than 13 per cent in early trades and overall revenue rose by 14.1 per cent to reach £3.1bn in the year ended December 1. Lucy Rumbold, equity research analyst at Quilter Cheviot, said the weak share price was due to “weak guidance for the 2025 run rate, implying another delay of two CFCs [customer fulfilment centre].”

“The primary driver of revenue growth has been the rollout of CFCs, with seven more in the pipeline set to go live over the next three years. However, no new contracts have been announced, which would be crucial for enhancing Ocado’s investment case,” Rumbold said.

Ocado reported a loss before tax of £374.5m, down from £393.3m in 2023. The grocer said the loss was mainly driven by additional depreciation and amortisation, adding: “The go-live of three sites within the previous 12 months, the annualisation of the three sites that went live during 2023 and technology projects going live in the last 12 months.”

The company said revenue growth was driven by a 12.5 per cent increase in orders on Ocado.com and a 12.1 per cent increase in active customers.