Ocado has announced plans to shut its customer fulfilment centre in Hatfield, Hertfordshire, putting around 2,300 jobs at risk. The closure comes as the online retailer's sales have fallen back after a rise in orders during the pandemic lockdowns when households switched to online grocery shopping and avoided supermarkets.
The move is not expected to affect the volume of orders fulfilled but will result in current customer orders being moved to other facilities across the UK. This decision follows Ocado and Marks & Spencer's joint-venture closure of their oldest warehouse located at Hatfield.
According to an official statement from Ocado (OCDO.L), "consultation with staff about potential job losses has begun," but they are determined "to redeploy as many people as possible" to other sites within their network. The transition is set for completion by summer 2023 when operations at Luton - which boasts newer technology - are expected to commence.
John Thompson, Head of Operations at Ocado said: “We understand that this decision will be difficult for our colleagues who work at our Hatfield site; however, we remain committed to supporting them throughout this process.”
Ocado emphasized that shutting down its oldest site was a strategic move towards embracing more advanced robot-led picking and packing operations requiring fewer staff members while ensuring increased efficiency levels.
Thompson added: “Our Luton facility represents a significant step forward for us technologically-speaking. As we continue investing in automation and innovation within our business model, it’s crucial that we adapt accordingly.”
Following these announcements on Friday morning trading session saw shares slide by 1.21%.