Harold Goddijn, the CEO of TomTom, has “really mixed feelings”, he says on the phone. According to Goddijn, the departure of five hundred employees from the Amsterdam mapmaker, which the company announced on Wednesday, is “very sour for the employees, who have often been associated with TomTom for a long time and have worked to help the company further”.
At the same time, the departure of the employees – 10 percent of the total – is inevitable, according to the CEO. The reorganization at the tech company is the result of a new „advanced, automated map makingplatform”, which requires less manpower. Letting computers do human work will eliminate hundreds of jobs in the Maps division and allow TomTom to produce “fresher and richer” maps, the company said in a press release.
The layoffs will take place in twenty countries, including at the head office in Amsterdam, where TomTom has 1,700 employees. The company cannot yet say whether forced redundancies will take place, because the affected employees themselves have not yet been informed.
TomTom, founded by Peter-Frans Pauwels and Pieter Geelen, was founded in 1991 and is one of the global market leaders in digital maps. In 2008, the company bought mapmaker Tele Atlas after a tough takeover battle with competitor Garmin for a total of 2.9 billion euros. The company has been listed on the stock exchange since 2005.
TomTom became known with the navigation boxes of the same name. Now that navigating is easy via the smartphone, the company mainly earns money by supplying maps and traffic information to apps and car manufacturers. They use TomTom technology for their built-in navigation systems.
Chip shortages don’t help and the situation in Ukraine doesn’t help us either
difficult moment
The reorganization comes at a difficult time for TomTom. The company is highly dependent for its turnover on the sale of cars that use TomTom navigation systems. But car sales are stalling due to the corona crisis and worldwide chip shortages.
As a result, TomTom made a loss of 21.5 million euros on a turnover of more than 128 million euros in the first quarter of this year, the company announced last month. That was almost double from a year earlier.
“We are indeed suffering from the corona crisis,” Goddijn says. “Factories have closed. That does not help. Chip shortages are not helping and the situation in Ukraine is not helping us either.” At the moment there is a shortage of everything, says Goddijn. “Transport, metal, you can’t come up with such a crazy idea.”
The CEO is nevertheless optimistic about the future, he says. “We know that there is still a demand for new cars. And there is still a lot to catch up on. If the bottlenecks with transport problems and material shortages are solved, we will notice that.”
TomTom’s share price, already low after the company lost almost 90 percent of its market value in 2008 due to the credit crisis and a significant write-down on the Tele Atlas acquisition, has hardly moved in recent years. Investors reacted moderately positive to Wednesday’s news: the stock rose by about 2 percent on Wednesday.
A version of this article also appeared in the newspaper of June 2, 2022
