Ocado wields the axe to save £150m as debt squeeze tightens

Tom Haynes

Thu, 26 February 2026 at 8:27 pm GMT+9 2 min read

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Ocado has confirmed plans to cut around 1,000 jobs as it aims to save £150m to ease growing debt pressures.

The struggling grocery giant unveiled details of radical cost savings in its full-year results on Thursday, which revealed borrowing costs of £147m on a total debt pile of £1.5bn.

Tim Steiner, the company’s chief executive, said about 500 roles will be cut from its research and development arm as part of the restructuring – with the total number of redundancies accounting for 5pc of its workforce.

Ocado, which builds robot warehouses and owns 50pc of Ocado Retail, is making a significant attempt to improve its fortunes after recently losing crucial warehouse contracts in North America.

The company’s shares were rocked last year after US retailer Kroger confirmed plans to close three automated warehouses that used the company’s technology. This was followed by Sobeys, a supermarket in Canada, shutting another site using Ocado’s kit.

Mr Steiner said: “We were paid out by Kroger, and we own the equipment in those sites, so we have the opportunity to redeploy it across our global network and take off the valuable pieces like the robots.”

Ocado recorded profits of £395m for the year in 2025, which was an improvement on £374m of losses in 2025.

However, this was largely down to a unique accounting gain based on the way Ocado records its retail joint venture with M&S.

Mr Steiner said the latest changes will help the business become cash-flow positive by the second half of 2026, bolstered by the company’s revenues rising 12pc to £1.4bn.

He said this will help keep a lid on finance costs, which rose from £99m to £147m in the last financial year.

Mr Steiner said: “I don’t think it will take too long to achieve bookkeeping profitability. Our finance costs will start coming down as we use some of our cash in the course of the year.

“We’re sitting on an extraordinarily large amount of cash at the moment – just shy of £1bn.”

Ocado’s shares fell by 7.4pc in the wake of Wednesday’s results.

That was despite Mr Steiner claiming that Ocado still hopes to revive its sales in North America.

He said: “North America is a big focus for us right now because for the first time in eight years we’re actually able to talk to the market and show them the solutions we have actually developed over the years – and explore using those solutions in their business – for which I’m already seeing quite a lot of excitement.”

Mr Steiner added that Ocado had been in discussions with “key players” in the US.

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