TomTom to lay off 500 as it improves automated map-making

TomTom will slash hundreds of jobs due to improvements it has made in automating its mapmaking activities, the Dutch digital navigation company said on Wednesday, adding that the cuts will affect about a 10th of its global workforce.

“Regrettably, this will have an intended impact on approximately 500 employees in our Maps unit,” the company said in a statement. “The full assessment of the financial implications of the reset of the Maps unit is ongoing.”

ING analyst Marc Hesselink estimated that the cuts will hit relatively lower-paid workers, adding that savings and restructuring charges for the company should balance out at €30m each.

“Over recent years TomTom has been working towards the holy grail of a fully automated map-making process,” Hesselink said in a research note, adding that an investment drive launched in 2022 appears to have been successful.

CEO Harold Goddijn said higher levels of automation would build better, broader maps enabling it to address a wider market across its carmaker and tech customers.

TomTom shares rose slightly in Amsterdam during morning trade, but the stock has lost more than a quarter of its value since the start of the coronavirus pandemic.

The company, whose clients range from Volkswagen and Renault to Microsoft, has been hit by pandemic-caused supply chain shortages, which forced vehicle makers around the globe to slash production.

It reaffirmed its cash and sales forecasts in April, when it said it had seen limited immediate effects from Russia’s war in Ukraine as some factories belonging to carmakers and suppliers in the country remained in operation.

TomTom said it will provide an update as it announces its quarterly financial results on July 15.

Reuters