Chief executive Harold Godijn said the higher level of automation would lead to better, comprehensive maps that would enable it to address a broader market.
The Dutch digital navigation company said on Wednesday that TomTom will cut hundreds of jobs because of improvements it has made in automating its mapmaking activities, adding that the cuts would be around a tenth of its global workforce.
“Sadly, this will impact approximately 500 employees of our Maps unit,” the company said in a statement. “Full evaluation of the financial impacts of the reset of the Maps unit is ongoing.”
ING analyst Mark Hesselink estimated the cuts would affect relatively low-wage workers, with savings and restructuring fees for the company to be between around 30 million euros ($32 million) each.
“In 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 campaign launched this year has been a success.
Chief executive Harold Godijn said the higher level of automation will lead to better, comprehensive maps that will enable it to address the broader market of its carmaker and tech customers.
TomTom shares rose slightly in Amsterdam during morning trading, but the stock has lost more than a quarter of its value since the start of the coronavirus pandemic.
The company, whose customers range from Volkswagen and Renault to Microsoft, has been hit by supply chain constraints due to the pandemic, which has forced automakers around the world to cut production.
It confirmed 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 operational.
TomTom said it will provide an update as it announces its quarterly financial results on July 15.
($1 = 0.9332 Euro)
(Reporting by Sarah Moreland; Editing by Christopher Cushing, Kenneth Maxwell and Amelia Sithole-Mataris)
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