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]