Online grocery giant Ocado recently announced a major adjustment plan to cut 500 positions in its technology and finance departments. This move is a strategic adjustment taken by the company to reduce operating costs. As a company that continues to lose money financially, Ocado is actively using artificial intelligence (AI) technology to increase the productivity of engineering teams in order to cope with increasingly severe financial pressures.
Ocado currently has about 20,000 employees, and has cut 1,000 positions last year. The company's CEO Tim Steiner said the layoff decision was not easy, but the company hopes to increase the productivity of engineering teams and reduce future R&D spending by introducing AI tools. Despite the downsizing, Ocado continues to roll out new generations of robotics to customers including Kroger in the United States and Casino in France to maintain its technological leadership in the industry.
In the high-tech warehouse in Luton, more than one-third of the goods have been selected by robots, and this proportion is expected to reach 70% in the future. Steiner noted that AI not only improves the productivity of robots in warehouses, but also allows companies to reduce recruitment of new employees as sales grow. This technological innovation has brought significant operational efficiency improvements to Ocado, and also laid a solid foundation for the company's future development.
However, Ocado's stock price plummeted 17% after the company announced the news, due to disappointment in its tech sales growth expectations. The growth is expected to be only 10% this year, compared with 18% last year. Due to delays in construction of two new warehouses in Kroger, Ocado's technical sales have been affected to a certain extent. Nevertheless, Steiner stressed that the U.S. market is crucial to Ocado, with almost all required equipment already in the United States, so changes in tariff policies will not affect the equipment configuration of these two warehouses.
Over the past year, Ocado's pre-tax loss was £374.5 million, despite sales up 14% year-on-year to £3.1 billion, and the increase in profitability was offset by impairment of older equipment. In addition, Ocado also encountered difficulties in negotiating shares with British retailer Marks & Spencer, who said that it would not pay related fees due to failure to meet its performance targets. This series of financial challenges has forced Ocado to take more radical cost control measures.
In the retail industry, layoffs are becoming increasingly common. Aldi is undergoing a headquarters restructuring, potentially cutting up to 350 positions; Sainsbury's has also announced a 3,000 job cuts, while Tesco will cut 400 jobs. This trend reflects the general response strategy of the retail industry when it faces market changes and cost pressures.
Key points: Ocado plans to lay off 500 jobs to reduce costs using AI technology; the company's stock price fell sharply by 17% due to the downward trend in technology sales expectations; in the US market, Ocado's equipment configuration is not affected by tariff policies and continues to provide customers with new technology.