Ocado is planning significant redundancies as part of a renewed cost-cutting drive, according to reports – the CEO said areas of the market that had ‘not developed as anticipated’
A leading UK supermarket chain is reportedly planning significant job cuts, with up to 1,000 positions potentially at risk. Ocado is said to be considering substantial redundancies as part of a fresh cost-saving initiative.
The company could see as many as 1,000 jobs in jeopardy as it strives to bounce back from a challenging year. It’s believed that the majority of these cuts will occur within the firm’s UK-based head office.
Potential reductions could span across human resources, legal and technology roles. In November, supermarket group Kroger announced plans to close three of its Customer Fulfilment Centres (CFCs), a move which briefly saw Ocado shares dip to around the 180p mark, mirroring the flotation price of its 2010 initial public offering, reports Birmingham Live.
Canada’s Sobeys followed suit late last month, unexpectedly revealing plans to shut down one CFC in Calgary, Alberta, due to slower-than-expected growth and the size of the region’s online grocery market.
Ocado’s “mutual exclusivity agreements” with most retailers utilising its technology came to an end in December.
Over the weekend, Ocado CEO Tim Steiner insisted that the closure by Sobeys represented a “pragmatic approach to refining the network”, acknowledging areas of the market that had “not developed as anticipated”.
He added: “Online grocery in North America has continued to develop and Ocado’s technology has evolved significantly since our first CFCs were launched in the region.”
“The changes we have made in our relationships with both Sobeys and Kroger represent a reset of our North American business, placing those partnerships in the best position to secure long-term growth, while reopening a substantial market for Ocado’s much evolved technology.”
An Ocado spokesperson told the Times: “We regularly review our operations to ensure we’re set up for long-term success.
“If and when decisions are made that affect our people, we are committed to communicating with them directly and ensuring they are supported throughout.”