TomTom to chop 10% of workforce, blames automation tech

Improvements in mapmaking platform to cost 500 employees their future at geolocation tech provider

TomTom says it is laying off 10 percent of its global workforce due to advances in automation technology and greater use of digital techniques in its mapmaking process.

The planned cuts will equate to about 500 employees at the Netherlands-based geolocation tech specialist, which was hit hard by the pandemic and remains in recovery mode.

"Higher levels of automation and the integration of a variety of digital sources will result in fresher and richer maps, with wider coverage," said CEO Harold Goddijn. "These better maps will improve our product offerings and allow us to address a broader market, both in the Automotive and Enterprise businesses."

In its 2021 Annual Report, TomTom said its products and services are underpinned by its mapmaking platform, using a blend of machine learning and cartographer skills to integrate data from a variety of source. The platform is using more automation with customers data being fed into a location DB.

CEO Goddijn said in a statement the "improvements in our mapmaking technology" would yield "material efficiency gains" and this along with better maps would "strengthen our competitive position."

"Regrettably, this will have an intended impact on approximately 500 employees in our Maps unit, equivalent to around 10 percent of our total headcount," TomTom added, saying it is still assessing the financial implications for the division.

The pandemic smiled on a multitude of technology businesses since early 2020, with the dynamics of lockdowns playing into the hands of device and peripherals makers, as well as purveyors of cloud services and more.

However, TomTom's business was hit: it turned over €708 million ($758.8 million) in 2019 and this had fallen to €506.9 million ($543 million) in 2021.

According to a PwC report, smart automation is forecast to boost global gross domestic product from AI by $15 trillion come 2030. "This extra wealth will also generate the demand for many jobs, but there are also concerns that it could displace many existing jobs," the report says.

Some 200,000 existing jobs across 29 countries were assessed by PwC. It estimates 3 percent of jobs are at risk in the early 2020s and around 30 percent by the mid 2030.

It says automation's impact will vary by industry. For example, the transport sector is thought to be heavily at risk with up to half the roles vulnerable. The health sector, by contrast, is way below the average. ®

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