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TomTom to cut 10% of jobs as smartphones take over

updated 07:50 pm EST, Thu December 8, 2011

Standalone navigation devices struggle to compete

TomTom has announced plans to make significant cuts to its workforce, a move that will leave 10 percent of its current employees out of work. The layoffs are expected to help the company reduce costs as it struggles to survive in a market that has encountered difficulty maintaining hardware sales.

The company claims to be making significant changes to its research-and-development structure, grouping the activities into ten product units in an effort to streamline operations and quickly develop new products.

"The new structure brings more transparency and accountability; makes it easier to make innovation choices and will reduce our time to market," said TomTom CEO Harold Goddijn.

Companies producing personal navigation devices have faced stiff competition from smartphones equipped with GPS receivers. Some players, including TomTom, have engaged the smartphone market by offering their own apps with offline maps, however the high-price apps must contend with free alternatives such as Google Maps.

TomTom plans to continue offering personal navigation devices, automotive systems, fitness devices and map services. The company expects the restructuring and layoffs to bring annual savings of approximately $67 million. [via Financial Times]



By Electronista Staff
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  1. ElectroTech

    Fresh-Faced Recruit

    Joined: Nov 2008

    +2

    More Blood on Apple's iPhone

    So many industries keep falling to the impact of the iPhone. Pity it would never get off the ground according to so many industry insiders and pundits back in 2007.

  1. mytdave

    Fresh-Faced Recruit

    Joined: Aug 2000

    -1

    think future

    All companies need to constantly think about their products, and question whether the function of the widget they make can be replicated/replaced elsewhere. "Can the functions of our device be done on a smart phone?" If yes, then it's time to phase out the device and put the function in software that can be sold at a reasonable price.

    It's not just smart phones however. There will always be a future disruptive technology, so intelligent companies need to always be on the lookout, and be ready to adjust or phase out current products and develop new ones. Adapt or die. If you look to the future instead of just trying to defend your turf, you'll succeed, and you won't have to lay people off.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    0

    Re: think future

    "Can the functions of our device be done on a smart phone?"

    That isn't the question. The question is "can the functions of our device be done on a smart phone in a usable manner". If your GPS app keeps your phone from working as a phone, people aren't going to use it.

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