Ocado has announced plans to eliminate 1,000 roles as the retail technology group seeks to save £150m through a sweeping restructuring effort.

The company said around 5% of its global workforce will be impacted, with approximately two-thirds of the reductions taking place in the UK.

Most of the affected positions will be cut from its UK operations, headquartered in Hatfield, Hertfordshire. Roughly half of the roles being eliminated are in technology, while the remainder are support positions.

Ocado, which develops and operates robotic warehouse systems for supermarket partners, stated that it will reduce investment in research and development as part of its cost-saving drive. The move is expected to lower technology and support expenses by about £150m in 2026. The company also pointed to improved efficiencies from artificial intelligence and tighter cost controls as factors behind the reductions.

Under the restructuring plan, Ocado will reorganise its commercial, support and R&D functions. This includes combining Ocado Solutions and Ocado Intelligent Automation into a single unified division.

The announcement follows last year’s decision to cut 500 technology roles, when the business said it was increasingly relying on artificial intelligence to support research and engineering work.

Chief executive Tim Steiner said: “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.”

Shares in Ocado fell nearly 10% on Thursday morning and have dropped by more than a third over the past year, following a string of setbacks and cautious updates about its future prospects.

Last month, the company revealed that its Canadian partner would shut down a warehouse powered by Ocado’s robotics and automation systems, dealing another setback to its international expansion strategy.

Sobeys confirmed it would close the Calgary facility, attributing the move largely to the limited size of Alberta’s online grocery market and slower-than-expected growth in e-commerce demand.

The closure came less than three months after Ocado’s US partner, Kroger, shut three automated warehouses, a development that wiped nearly a fifth off the UK company’s market value.

Although widely recognised in the UK as an online supermarket, Ocado’s core business increasingly centres on supplying its proprietary software and robotics platform — known as the Ocado Smart Platform — to retailers worldwide to manage their delivery operations. The group currently operates 30 sites internationally.

Its UK retail business operates as a joint venture with Marks & Spencer and reports its financial results separately from the technology division.