TomTom axes 10% of workforce
Overhauls R&D groups
Sat-nav maker TomTom is axing 10 per cent of the workforce and reorganising the R&D budget to speed up the time it takes to get products to market.
The move is part of a restructuring programme designed to slash costs by some €50m and counter a 23 per cent slowdown in consumer sales reported in Q3.
"We will reduce the number of full time jobs by 457, which accounts for approximately 10 per cent of the total workforce. 255 roles will be made redundant, half of which are in The Netherlands," said Tom Tom.
"The remainder will be achieved through attrition. A restructuring charge of €14m will be booked in Q4 2011 in relation to the redundancies and rationalisation of office space," it added.
The firm said R&D work will be spread across 10 product group: Maps Traffic, Navigation, Automotive Systems, PNDs, Fleetservices, Fitness, Mobile, POIs and Speedcams.
A larger proportion of R&D budgets will be allocated to higher growth areas including maps, traffic intelligence and navigation.
CEO Harold Goddijn said: "The new structure brings more transparency and accountability; makes it easier to make innovation choices and will reduce our time to market."
He claimed the speed of product introductions will be seen from next year.
Third quarter numbers showed a 10 per cent slide in sales to €336m, but the profits went up 50 per cent to €29m. ®
Profits up 50%.
Sack 10% of workers.
Says it all, really.
I had Tomtom on my Nokia N95 way back when. Pretty sure you can buy it on the iPhone now.
I think Tomtom's problems two fold: car munfacturers fitting sat nav as standard and companies like Google giving away free sat nav functionality on their devices.
Tomtom are fighting a losing battle. They will go the way of all the big car alarm manufacturers of the 90s, selling a product which no-one needs any more. It will all end up with them hitting navigate to and selecting PricewaterhouseCoopers as the final destination.
In the early days of personal navigation, they had a virtual monopoly and they acted like Microsoft. There was no upgrade path and I was forced to buy 3 full licences for different smartphones over the years. They're website was crap and buggy. My serial number was never recognised and I was never able to download the few free upgrades I was entitled too.
And then there were alternatives. And a lot of early clients ran. Who would have thought?
It's always the same with these university educated manager types: they're shortsighted morons who think the sun shines out of their arse.