Ocado Group, the British technology and online grocery company renowned for its automated distribution centre model, announced on February 26, 2026, that it will cut around 1,000 jobs—about 5% of its global workforce—in a sweeping cost-saving restructuring plan. This move, designed to slash £150 million from technology and support costs in the 2025/26 fiscal year, comes as the company faces mounting financial pressures, shifting market dynamics, and a series of setbacks in North America.
According to company statements and reports from Sky News, BBC, and Reuters, the majority of the job losses—about two-thirds—will be in the UK, with most roles affected at Ocado’s headquarters in Hatfield, Hertfordshire. The cuts will primarily impact technology and support teams, especially research and development (R&D) roles, while the retail side of the business, including the online grocery joint venture with Marks & Spencer, remains unaffected.
Tim Steiner, Ocado’s chief executive, addressed the changes candidly: “Regrettably, this means a significant number of roles will no longer be required. We are grateful to colleagues who are affected by these changes, and whose talent and hard work have made a lasting contribution to Ocado. We will support those impacted through this process.” Steiner emphasized that the restructuring reflects a lower structural cost base that the company has been signaling for years and insisted that there is “zero expectation of more job cuts” in the near future, though he conceded, “business is tough and you have to make difficult decisions sometimes.”
The restructuring plan will see the merger of Ocado Solutions and Ocado Intelligent Automation into a single division as part of a broader effort to simplify the company’s operating model. Ocado said it has largely completed a significant phase of investment in robotics and automation capabilities, and, as that development cycle concludes, it will concentrate ongoing R&D investment on areas with the clearest path to value creation for Ocado and its partners. The company plans to move into a less capital-intensive R&D phase and reduce the capital expenditure required by customers to deploy its products.
Ocado employs just over 20,000 staff globally. The company’s decision to trim its workforce follows a year of major investment—over £800 million spent on R&D in the last four years alone. Now, with the completion of new generations of robotic equipment and digital platforms for retailers, Ocado says it no longer needs as many people to develop new projects. The company is also “benefiting from significant productivity enhancements from AI,” according to Steiner, which help write and check software code, allowing Ocado to “get more done with less people.”
Financially, Ocado’s recent results present a mixed picture. For the year ended November 30, 2025, the company reported a 59% jump in its core underlying profit measure to £178 million, with revenue up 12.1% to £1.36 billion. However, pre-tax losses from continuing operations widened to £377.6 million, compared to £339.8 million the previous year, reflecting ongoing challenges in scaling its technology business. On a bottom-line basis, Ocado swung to a £395.2 million profit, thanks to a substantial gain in the value of its share in Ocado Retail, but the underlying financial pressures remain.
Investors, however, have shown little confidence in the company’s outlook. Shares fell by almost 11% in early trading on February 26, 2026, compounding a 36% slump over the past year. The sharp decline is tied to a series of disappointing announcements, including the closure of robotic customer fulfilment centres (CFCs) by Ocado’s North American partners. US grocery giant Kroger is shutting three Ocado-run warehouses, while Canadian chain Sobeys is closing its Calgary centre, both citing weaker-than-expected demand for online grocery services in their respective markets. These closures have raised questions about the viability of Ocado’s capital-intensive distribution centre model—especially in regions where customer bases are spread over large geographic areas.
Industry analysts have weighed in, with Chris Beauchamp, chief market analyst at IG, remarking to the BBC, “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.”
Verushka Shetty, an equity research analyst at Morningstar, told Sky News, “Ocado had a decent consensus beat in its half-year 2025 results but subsequent announcements from Kroger and Sobeys about site closures have weakened investor confidence. Nevertheless, we still see long-term growth drivers, including Ocado ramping up its deployment of capital-light solutions and intelligent automation, as well as the shift away from exclusivity deals in the majority of markets, which previously limited the company to one client per market. However, our main concern is a negative flywheel effect, where shutdowns and slower CFC rollouts deter potential partners from signing on or existing partners from adding more CFCs.”
The local impact of the job cuts has not gone unnoticed. Labour MP for Hatfield, Andrew Lewin, described the news as “a serious setback,” telling the BBC, “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. Ocado's decision to cut hundreds of local jobs will hit hard,” he added, noting that staff now face uncertainty over their future.
Despite the setbacks, Ocado remains optimistic about future opportunities. The company is focusing efforts largely on the grocery market for future contracts, while continuing to serve existing clients in non-grocery sectors. The expiry of exclusivity agreements in most overseas markets, including the US, now allows Ocado to seek new partners. However, analysts remain cautious about the group’s ability to secure new deals, given the challenges with existing partners and a broader industry trend toward fulfilling online orders directly from stores rather than centralized distribution centres.
Looking ahead, Ocado forecasts that it will turn cash-flow positive in the second half of its 2025/26 fiscal year, with expectations of full-year cash-flow positivity in 2026/27. The company also plans to open six more robotic distribution centres for international partners in Japan, South Korea, the US, and Spain over the next two to three years, aiming to offset the recent closures in North America.
As Ocado navigates this period of transition, the company’s future hinges on its ability to adapt its technology, secure new partners, and restore investor confidence. For now, the cost-cutting measures and strategic refocus mark a pivotal moment for one of the UK’s most high-profile technology firms, as it seeks to redefine its place in the rapidly evolving world of online grocery and retail automation.