TomTom axes 10% of workforce

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. ®