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© alexey utemov dreamstime.com Electronics Production | October 01, 2014

Workforce reductions at Tieto's Product Development Services

Tieto’s business volumes in Product Development Services (PDS) will decline due to insourcing decision taken by one key customer. Due to this, PDS will start personnel negotiations in the impacted countries in Europe and Asia.
In Finland, a maximum of 350 persons may be affected while Tieto expects the number of actual reductions to remain below 300. Additionally, PDS seeks to reduce a maximum of 600 positions in Central European and Asian locations. Redundancies are expected to materialize mostly during the next six months. 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 1 October 2014.

“The Product Development Services unit and our customers operate in a market where competition is very intense and the demand throughout the value chain is highly volatile. In the telecom market, significant changes are commonplace, as witnessed by the many transformations that have happened in our client and competitor base over the past years. Although today’s news is a big disappointment to us, we will continue to implement our strategy of being a trusted product development partner providing high-quality services to a growing number of global technology companies. With competences in cloud, next generation radio, connected devices and many other technology areas, we continue to be the leading product development partner in the Nordic countries and one of the top players globally,” says Antti Vasara, Executive Vice President, Product Development Services.

PDS represented 16% of Tieto’s sales during the first half of 2014 and this customer accounts for a few percentage points of the Group’s sales. PDS sales for 2014 are expected to decline compared to 2013.

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