In a move that has shocked absolutely no one paying attention, Ocado, the online grocery specialist, has decided to cut 500 jobs in its technology and finance divisions. Why? Because artificial intelligence has apparently swooped in like a Silicon Valley superhero to save the day—or at least save on payroll.
With AI helping to boost the productivity of its engineering team, Ocado is not just embracing technology but giving it a big, sloppy kiss on the mouth while shoving 500 employees out the back door. The company, which is already nursing a loss of £374.5m for the year to 1 December, is now hoping that fewer humans and more robots will help it meet its cashflow targets. Spoiler alert: it probably won’t.
Tim Steiner, Ocado’s chief executive and resident purveyor of corporate euphemisms, described the cuts as "never something that’s easy or that we take lightly." Translation: It’s not easy for us, but it’s about to be a lot harder for the 500 people who just lost their jobs. But don’t worry—AI is here to do the work of those humans without all that pesky salary, healthcare, or inconvenient need for sleep.
The robots are not only taking over jobs but also picking groceries in the company’s warehouses. At its Luton facility, a third of individual items are picked by robots, and the goal is to hit 70% soon. Somewhere, an HR manager is sighing in relief at the thought of not having to process overtime requests from robots.
While Ocado’s tech-heavy strategy might sound innovative, the stock market seemed to disagree. Shares in the group plummeted 17%, suggesting that investors are not entirely sold on a future where robots and AI carry the weight of a company that’s been teetering on the edge of profitability. After all, AI might be great at crunching numbers, but it can’t exactly buy groceries—or invest in Ocado shares, for that matter.
And speaking of disappointing numbers, Ocado’s sales may have risen 14% to £3.1bn, but it still managed to burn through enough cash to post yet another pre-tax loss. Writing down ageing equipment and wiping out the last £29.1m of an expected £190m payment from its M&S deal seems like a masterclass in how not to handle a balance sheet.
Meanwhile, Ocado’s decision to spend £1.3m on specialists to argue with M&S over a missed performance target is like throwing good money after bad. Maybe they should have just asked their AI to negotiate. Who knows? Perhaps it could’ve created an algorithm to detect corporate BS before it cost them millions.
Ocado isn’t the only grocery giant getting a little trim. Aldi, Sainsbury’s, and Tesco have all announced job cuts. While Aldi insists no customer-facing roles are at risk, the folks behind the scenes—finance and buying teams—are right to keep their CVs updated.
In the grander scheme, Ocado’s AI-driven purge is just another chapter in the never-ending story of companies choosing algorithms over actual people. It’s a bold strategy, Cotton. Let’s see if it pays off.
Stay tuned as Ocado continues to automate its workforce, maybe one day even cutting the CEO position. After all, if AI can pick groceries, why not corporate strategies? At the very least, it would be cheaper.
