Tieto outline another 620 job cuts

Tieto outline another 620 job cuts

Just months after outlining plans to axe 350 jobs, recession hit Scandinavian IT services vendor Tieto says it has begun the process of cutting a further 620 positions.

Tieto says approximately 300 jobs will go in Finland, 150 in Sweden, and 170 in the other 10 countries in which it operates. In addition, the firm says it will discuss the possibility of temporarily laying off more staff in Finland.

All negotiations with union representatives will be completed during the second quarter.

The latest cuts come after February's decision to cut 170 jobs in Sweden with a further 180 going from Denmark, Norway, Germany, the UK, Latvia and India. A major part of this processes has already been completed.

Other cost cutting moves, including the consolidation of offices, reducing the number of subcontractors and slashing business expenses, will also be implemented.

Hannu Syrjälä, president and CEO, Tieto, says: "The decline in customer demand for IT services has been stronger and faster than we anticipated at the start of the year. Tieto has started a number of streamlining actions to address this situation with the aim of reaching new cost savings in the amount of EUR 100 million. Personnel adjustments are unfortunately also needed to adjust our cost-base."

Last month Tieto warned that it expects its full-year net sales to be lower than in 2008 as tough market conditions continue, with the banking and telecom sectors particularly hard hit.

In January 2008 the firm embarked on a restructuring and cost cutting programme designed to generate annual savings of more than EUR100 million by the end of 2009.

The programme followed an 18-month run of volatile earnings which had mainly been caused by project over-runs in the company's banking and insurance and healthcare and welfare units.

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