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©dirk-ercken-dreamstime.com Electronics Production | March 20, 2012

Tieto to cut 1,300 jobs worldwide

Tieto announced today that it will restructure its operations, leading to the reduction of about 1,300 employees worldwide.
According to a company statement, the cuts aim to achieve annualized net savings of 50 million euro by 2014, with the cuts mainly occurring in 2012. 500 of the cuts will be located in Finland, 300 in Sweden and 500 in other countries.

“Countries where the long-term outlook for EBIT is less than the company’s 10% target will be optimized for profitability and evaluated for potential exit,” a statement by the company said.

The one-off costs of the cuts are expected to be 50 million euro.

Of the cuts, CEO and President Kimmo Alkio said, “(n)aturally, it is challenging in the short term to conduct the necessary cost reduction activities, which are necessary to create better price competitiveness and an overall competitive cost structure for the future”.

The cuts are part of a restructuring effort that to expand the company's capabilities to cover full IT lifecycle services by investing in Consulting and System Integration (CSI). Product Engineering Services (PES). The company said it aims to increase the share of CSI revenue from the current level of less than 20% to over 25% of total revenues towards the end of the strategy period.

The transitions will happen during the second half of 2012, and officially adopt it as from 1 January 2013.

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