Ocado puts 2,300 jobs at risk, as the online grocer announces warehouse closure
25 April 2023, 11:25
The online grocer has announced the closure of its oldest site in Hertfordshire in a move that's expected to impact 2,300 workers.
Ocado has announced its first ever automated site based in Hatfield is to close, which handles roughly a fifth of the grocer’s 400,000 weekly orders.
The company, which is part of a joint venture with Marks & Spencer, saw an uptick in orders during the pandemic lockdowns, however these numbers declined after the lockdowns ended.
It was this decline in sales that influenced the decision to close the warehouse, as the company made a record annual loss of more than £500m last year.
According to the company, the closures will not affect customers, as the work will be transferred to its “high-productivity, next-generation facilities” around the UK, including a new site that’s due to open in Luton later this year.
The replacement sites are automated customer fulfilment centres, which use ‘picking bots’ to pack customer orders. They require less staff to fulfil orders and are more efficient, according to the company.
Ocado said the latest generation of these bots are “consistently achieving well over 200 units picked per labour hour” compared to “about 150” in the first generation warehouse in Hatfield.
In a statement to shareholders, the company said its oldest site “remains a foundation stone in the Ocado story” but the last decade has “unveiled a raft of new innovations, enabling huge leaps forward" in production.
Tim Steiner, Ocado Group’s CEO, said: “As the online grocery channel grows, our new, enhanced fulfilment centres and technologies will drive a step change in customer experience and efficiency.”
He also added: “"We want to keep as much of this talent and experience within the business as possible and expect to retain a large proportion of colleagues impacted by these changes, either in our new Luton CFC or across our wider UK network.
"We will be doing everything we can to support those affected through the consultation."
