Tieto and its customers are facing revolutionary change as digitalization enables new business models in which IT plays a central role. Tieto is strengthening and renewing its services and competences to ensure a leading position in this development. The increased focus on new market opportunities will include recruitments of new competences as well as adjustments in existing resourcing.
Tieto aims to be at the forefront of efficient delivery of high-quality services. This means pursuing new service models enabled by the ongoing digitalization, including service standardization and automation. As a consequence, Tieto has initiated personnel negotiations affecting up to 500 positions in Finland and 340 in other countries, mainly in Sweden and the Czech Republic. The planned reductions will affect the Managed Services (up to 650) and Consulting and System Integration (up to 190) service lines. It is expected that the reductions will be implemented during 2015.
At the same time, Tieto will continue to invest in its high-growth businesses. To grow faster than the market in the longer term, Tieto also plans to continue to recruit new competences and retrain existing employees to match the needs in new service areas. During 2015, the company expects to add several hundred positions in new competence areas, including a substantial amount in the Nordic countries.
Digitalization and customer experience – future success factors
In order to stay competitive, enterprises and societies must focus on delivering a superior customer experience, enabled by digital technologies and business models. Digitalization provides opportunities for enterprises, including IT service providers, who play a critical role in this transformation. Tieto is well positioned to capture this opportunity, as the company has a focused strategy and solid execution. The company proactively renews and strengthens its service portfolio and competencies in order to be a preferred digitalization partner to customers. This development has started with investments in new growth businesses and industrialization of infrastructure and application services. Standardization and automation significantly enhance Tieto customers’ experience, speed and quality of service. Through investments, Tieto expects to increase its competitiveness and aims to gain a higher market share in its core markets.
“Our renewal continues with deployment of new automated services, enabled by new technologies. The shift from traditional to new services is key for growth but also changes our competence structures. While recruiting and retraining for growth businesses we unfortunately need to also reduce a number of roles within traditional service areas. Tieto actively renews itself to drive the digitalization of Nordic enterprises and society and I am confident that we will succeed in improving both our customers’ and our own competitiveness. At the same time, we will support our employees through this continuous change,” says Kimmo Alkio, President and CEO.
Tieto continues to improve competitiveness and deliver solid performance
In Managed Services, the planned reductions are expected to materialize by the end of the second quarter. The planned redundancies in Consulting and System Integration will be carried out by the end of 2015. In each country, Tieto will adhere to the local legislation and practices in the process. In Finland, the company will start the process by making a proposal to employee representatives on 13 January 2015.
Tieto currently estimates that it will book some EUR 35 million in restructuring costs related to these actions, mainly in the first half of 2015. The company anticipates that the actions will result in annualized gross savings of around EUR 50 million, which will be partly offset by recruitments of new talent within growth areas. Around half of the savings are anticipated to affect cost base for 2015, mainly in the second half.
Tieto anticipates solid development to continue in both revenues for IT services and Group profitability. The company will provide further guidance for 2015 in its financial statements bulletin to be published on 5 February.
Further information for media:
Kia Haring, Head of External Communications, tel. +358 40 765 3700, kia.haring (at) tieto.com
Further information for investors:
Heinonen, CFO, tel. +358 2072 66329, +358 50 393 4950, lasse.heinonen (at) tieto.com
Tieto is the largest Nordic IT services company providing full life-cycle services for both the private and public sectors and product development services in the field of communications and embedded technologies. The company has global presence through its product development business and global delivery centres. Tieto is committed to developing enterprises and society through IT by realizing new opportunities in customers’ business transformation. At Tieto, we believe in professional development and results.
Founded 1968, headquartered in Helsinki, Finland and with approximately 14 000 experts, the company operates in over 20 countries with net sales of approximately EUR 1.6 billion. Tieto’s shares are listed on Nasdaq in Helsinki and Stockholm. Please visit www.tieto.com for more information.