TomTom to shed jobs as revenues fall

TomTom, the Dutch satellite navigation equipment maker and digital mapping group, is looking to make cost savings of €50m (£43m), including job losses, after its revenues tumbled in its third quarter.

However, the group cheered investors by posting a 50 per cent jump in operating profits to €29m, partly helped by a rise in the value of the dollar against the euro. Shares in TomTom jumped nearly 19 per cent.

Harold Goddijn, chief executive, said its restructuring will affect an unspecified number of its 3,500 employees globally.

He said: "The reduction of the workforce is a regrettable but necessary step to adapt the company to the changed conditions in the markets we operate in."

Total sales fell by 10 per cent to €336m in its third quarter, while TomTom's consumer division – which relies heavily on sales of personal navigation devices – saw its revenues tumble by 23 per cent to €225m in the quarter.

While it did not offset the fall, the unit is seeing strong uptake from consumers of its real-time traffic data services. The group's automotive, licensing and business solutions divisions grew revenues by 43 per cent, 27 per cent and 33 per cent, respectively.