TomTom cuts jobs, increases profit
Dutch satellite navigation company TomTom has announced a major reorganisation involving job cuts. The company has not yet said how job numbers will be reduced, but forced dismissals are not being ruled out. The company wants to shave 50 million euros of its costs in 2012.
TomTom says the reorganisation has been prompted by changing market conditions. Car manufacturers are increasingly building cars with satnav systems already installed. As a result, TomTom is facing decreasing sales of its products to car owners.
Turnover in the private customer market decreased by 23 percent in the third quarter of 2011 compared to the same period last year. However, sales of satnav systems to the car industry showed substantial growth.
Total turnover decreased by 10 percent in the third quarter, in the United States in particular. Overall net profit, on the other hand, increased by 50 percent to 29 million euros, a much better result than analysts had expected.
The company says it will keep investing in its global map data base, development of navigational technology and traffic information services.
On Monday, TomTom's shares opened 20 percent higher on the Amsterdam stock exchange.
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