Ocado to axe R&D roles in cost-cutting drive, despite narrowed losses
Ocado is set to reduce its research and development workforce both in the UK and globally in a bid to return to profitability, despite a strong performance from its online retail division.
Ocado is set to reduce its research and development (R&D) workforce both in the UK and globally as part of its effort to return to profitability, despite a strong performance from its online retail division.
The grocery technology giant announced plans to scale back R&D spending in a bid to cut costs, having invested over £800m in the division over the past four years.
CEO Tim Steiner did not specify the number of job cuts but emphasised that it would be “significantly” fewer than the 1,000 redundancies made across the business in 2023-24.
“The cost reductions we’re targeting are a low single-digit percentage of our global workforce,” he said
Steiner acknowledged the difficulty of the decision, stating, “It’s never something that’s easy or that we take lightly. It’s a very difficult day for us to have to announce that.”
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Ocado, which employs nearly 20,000 people worldwide, operates around eight R&D sites across various countries, with about half of them located in the UK.
These job reductions are part of the company’s broader goal to achieve positive cash flow by 2026.
Despite rising revenues, Ocado posted a pre-tax loss of £374.5m for the year ending 1 December 2024, slightly improving from a loss of £393.6 m the previous year.
Following the release of its annual results, the retailer’s shares dropped as much as 16% due to its disappointing growth forecast for its technology solutions division.
The company also noted it was in ongoing discussions with its retail partner, M&S, regarding the final payment of £190.7m due in April as part of their 50-50 joint venture deal, Ocado Retail.
This venture, which launched in 2019, has not met its performance targets, leading to negotiations over the payment. Ocado has previously suggested that it may take legal action to secure the agreed-upon amount.
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