TomTom has announced that it’s laying off 136 employees as part of a restructuring process that will see the company focus on its mapping and navigation business.
Of the 136 job losses, 57 will be in its native Netherlands, the company added.
When TomTom announced its Q2 results back in July, the Dutch tech firm reported strong overall numbers around its automotive and licensing businesses, however revenue from its consumer products arm, which include a host of watches and fitness bands, fell 20 percent. As such, the company suggested that it would be making moves away from consumers sports products. “We are not satisfied with the progress we are making (in sports),” said TomTom CEO Harold Goddijn at the time.
Founded in 1991, TomTom is best known for its GPS-powered services and devices, including dedicated satellite navigation units for cars, and the company is one of the major global online mapping platforms, alongside Google Maps, Here, and OpenStreetMap. The company also offers a number of other services, such as telematics to help businesses manage their fleet of vehicles, as well as automotive services that include maps for self-driving cars, advanced driver assistance systems (ADAS), and parking data. And this, it seems, is where TomTom sees its future.
Wear art thou?
While the wearables market continues on an upwards trajectory, with IDC recently reporting that the sector grew by 10.3 percent in Q2 2017, TomTom isn’t a major player in the field. The likes of China’s Xiaomi, Apple, and Fitbit are making strides, while others such as Garmin, Fossil, and Samsung tussle it out for mindshare. Consumer hardware is an expensive foray, and with so much competition already, TomTom’s shift away from the market should come as little surprise.
TomTom’s shares never quite recovered from the advent of smartphones, which ushered in cheap navigation services for everyone. From its peak of around $65 per share in 2007, the company’s value plummeted to less than $3 within two years — a period in which both Google and Apple entered the smartphone world in a big way.
But TomTom still holds a valuable arsenal of maps, data, and navigation smarts which has seen it notch up some notable partnerships in recent times — Uber and TomTom signed a global multi-year deal back in 2015 for maps and traffic data, while Microsoft tapped up TomTom a year later to bring location-based services to Azure. Earlier this year, Cisco teamed up with TomTom earlier this year to create ‘next generation’ traffic monitoring tech, and Baidu also announced plans to collaborate with TomTom on digital maps for computer-assisted driving.
Today’s news doesn’t mean that TomTom is exiting the consumer wearables market altogether though. The company said that it will “…continue to sell consumer sports products, and support its sports customers,” according to a press release. But it is “reorganising parts of its consumer sports business” as part of its “strategy to build on its leading position in navigation technologies and to provide location content, software and services to business customers,” it added.