Despite 1300 job cuts globally, Finland's IT major Tieto Corporation is planning to restructure the business and may exit some unprofitable markets. Tieto will downsize 1,300 jobs including about 500 in Finland and 300 in Sweden. The company is planning to save over 50 million euros in annual costs by cutting these jobs.
Speaking to Business Standard, Kimmo Alkio, president and CEO, Tieto Corporation said, "Concern and uncertainty about the European economy and the euro crises led to job cuts. Our aim is to make Tieto among top three service provider company. By 2016, we are expecting to grow by 15 per cent. Our strategy seeks to strengthen our position in our core markets and as a leading player in the global product engineering solutions space by consolidating our core markets and leveraging our industry expertise to deliver superior value to customers."
Eventhough, Alkio did not disclose how it will impact on the Indian operations or how many jobs will be cut in India. Currently, there are over 1600 of Tieto India employees. It has delivery centres in Pune and Bangalore. It will focus on specific industries particularly financial services, government and health care, manufacturing, telecommunications and utilities. Its 20 per cent of revenues come from product engineering services.
In the initial phase of the strategy, Tieto will focus on building the platform for offering full IT lifecycle services by expanding its services in the Consulting and System Integration (CSI) segment. This will be achieved by enhancing competencies through knowledge transformation and adding new skills as well. Tieto intends to increase the share of CSI revenues to over 25 per cent of its total revenues from the current level of less than 20 per cent.
Tieto’s core markets are the Nordic countries, where Tieto has a strong position in Finland and Sweden.
In Russia, Tieto will support Nordic clients and emphasize profitability. Tieto will continue to grow its offshore development centres as the company will build upon its industry expertise and expand its global customer base. But at the same time, Tieto is reviewing operations in Germany this year. The Finnish government holds 10.3 per cent of Tieto shares.
"Globally the IT services market continues to be highly dynamic, providing ample opportunities for innovation and new businesses. India continues to remain one of Tieto’s main delivery countries we see great potential to increase and grow our existing delivery centers", says Kavilesh Gupta, executive vice president, strategy and corporate development.