TomTom, the Dutch map company that used to be known for the portable GPS devices found in many cars before the advent of smartphones, announced an “improvement in our mapmaking technology” in a press release on Wednesday. Harold Goddijn, the company’s CEO, is quoted as saying, “Higher levels of automation and the integration of a variety of digital sources will result in fresher and richer maps, with wider coverage.”
“Regrettably,” the company said in its press release, “this will have an intended impact on approximately 500 employees in our Maps unit, equivalent to around 10% of our total global headcount.”
TomTom has had to pivot several times since its founding in 1991. In the 1990s it made applications for businesses for reading meters or barcodes on early handheld devices like the Palm Pilot. Then it built the GPS devices for cars the brand would ultimately become known for. That business was essentially destroyed when Google released a free navigation service with Google Maps available on every smartphone. The company controversially stopped updating maps for devices that had “lifetime update” guarantees in 2018, claiming by “lifetime” it meant the lifetime of the device, not the person who bought it.
Since the decline of standalone GPS devices, TomTom pivoted once again to selling its mapping services directly to car manufacturers for their own vehicle infotainment systems, the ones most every driver ignores for CarPlay or Android Auto instead. It also sells its software to some businesses for fleet routing and management purposes.
Running a mapping service has lots of constant costs, mainly making sure the maps are constantly up to date. The gist of the press release is TomTom has figured out how to do this using algorithms instead of human workers. It’s not clear if the company’s poor earnings results in recent quarters has anything to do with the mass layoffs.