As part of its long-term renewal and in response to the need to increase its productivity and price competitiveness, Tieto has today initiated personnel negotiations in Finland. The negotiations affect up to 250 employees, of which up to 180 are in the Technology Services and Modernization service line and the remainder mainly in the Public, Healthcare and Welfare industry group and Support Functions. These actions are based on increased service standardization and a continuation to the global automation programme initiated in 2015. The planned reductions in Finland are expected to materialize mainly by the end of June.
“We have successfully renewed our company during the past years. Simultaneously, our industry is continuously evolving at a rapid pace with the gradual increase in automation as one of the change drivers. To ensure our ability to invest in new technologies and services, we need to continue to drive our price competitiveness and productivity improvement. This inevitably includes personnel reductions while we simultaneously create new positions in emerging areas. In this rapidly changing world of digitalization, the required skills and competences are evolving fast. With this in mind, we actively support all employees in this change,” says Kimmo Alkio, President and CEO.
Tieto currently employs globally close to 14 000 experts, of which around 3 600 in Finland. The company will continue to invest in innovation in its growth businesses, including start-ups. In Finland, Tieto has recruited around 300 new experts, such as industry and solution consultants, architects and software developers, during the past year. The company annually invests around EUR 120 million in the development of new offerings and its data centres.
The company additionally seeks to optimize its productivity and cost structure globally. The company expects that the actions altogether, including the anticipated reductions in Finland, will result in annualized gross savings of close to EUR 40 million. It is estimated that over EUR 20 million in savings will affect the cost base for 2017, mainly in the second half, contributing to the expectation of continued solid financial development.
Overall in 2017, Tieto’s restructuring needs will be based on automation, other productivity improvements and the need to align the company’s competence base with market demand. Tieto currently estimates that its full-year restructuring costs in 2017 will be 1–2% of Group sales. The company will provide guidance for 2017 in its financial statements release, which will be published on 2 February.