Tieto axes 220 Finnish staff; lays off another 1500 temporarily
29 May 2009 | 6752 views | 1
Troubled Scandinavian IT services vendor Tieto is cutting 220 jobs in Finland and temporarily laying off a further 1500 staff in the country as it looks to slash costs.
The firm warned in April that around 300 jobs would be lost in Finland as part of a plan to cut 620 positions from its operations worldwide.
It has now confirmed 220 job cuts, with 100 made during June and July and the rest by the end of the year. Most jobs will go in the Helsinki area but there will be redundancies in other locations in Finland too.
Although 80 fewer jobs than expected have gone permanently, a further 1500 employees - out of a Finish workforce of 5700 - will be laid off temporarily, either for a fixed period or until further notice.
Tieto says most will be laid off for a fixed period varying from two weeks to ninety days. The actions will be started on 1 June 2009.
The company is also consolidating its offices in Helsinki, Tampere and Oulu, with staff currently working in other locations moving to these sites.
Ari Karppinen, country head, Finland, Tieto, says the firm is going through a "profound structural change" in the country because IT services are moving offshore to places with lower cost levels.
"Uncertainty prevails over the future development of the IT market. However, by favouring layoffs over redundancies we are able to maintain our flexibility," says Karppinen.
The latest cost cutting measures 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.
In March the firm 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.