Tieto drives competitiveness further to enable continued investments in innovation and growth – announces personnel negotiations in Finland
Tieto Corporation STOCK EXCHANGE RELEASE 17 January 2017, 9.00 am EET
Today, the simultaneous market requirements for extreme productivity and innovation are increasing. To manage this duality and continue supporting its customers in their business renewal, Tieto is taking further actions to drive its competitiveness and enable continued investments in innovation and growth.
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.
Further information for media:
Kia Haring, Head of Communications, tel. +358 40 765 3700, kia.haring (at) tieto.com
Further information for investors:
Lasse Heinonen, CFO, tel. +358 2072 66329, +358 50 393 4950, lasse.heinonen (at) tieto.com
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Nasdaq Helsinki
Nasdaq Stockholm
Principal Media
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.
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