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TomTom to cut 10% of jobs due to improved automation

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Re: TomTom to cut 10% of jobs due to improved automation

#31

Post by usrusr »

wjnc wrote: post #27
lozenge wrote: post #22

Earlier quoted context omitted.

Transfer to who? All the people who know how to put the assets to good use... are already employed by TomTom. As long as the company provides value to shareholders and customers, why wind it down? Not everything had to be about growth, growth, growth.

Let me be the first to say that hardcore capitalism isn't my usual purview. And that exactly the diversity of stakeholders is why I like this question. TomTom obviously offers no value to shareholders (no dividend policy, history of losses, perhaps except those searching for volatily). It's 49% owned by the directors with a 51% float. It clearly offers some value to customers since it has revenues. However, the reven…

Plenty of people working for negative value except for their salaries and whatever wins they provide company owners in the negative sum games they engage in.

Re: TomTom to cut 10% of jobs due to improved automation

#33

Post by scoopertrooper »

helsinkiandrew wrote: post #12
wjnc wrote: post #6

TomTom is such an interesting story in technology and finance. Went from zero to $ 10B+ between '05 - '07 [1]. Everyone you knew had one, used one, loved one. Then the sudden boom in mobile phones and mobile internet and the financial crisis. Total crash of the stock. Pretty much subsistence without any proper profits since '09-'10. Not enough IP to get bought, a few licensing deals here and there. Always falling rev…

Wow an unbroken 13 year stretch of ever decreasing revenue: https://companiesmarketcap.com/tomtom/revenue/

I'd hate to be the one left holding that bag.

https://companiesmarketcap.com/tomtom/marketcap/

Re: TomTom to cut 10% of jobs due to improved automation

#34

Post by DonHopkins »

wjnc wrote: post #6

TomTom is such an interesting story in technology and finance. Went from zero to $ 10B+ between '05 - '07 [1]. Everyone you knew had one, used one, loved one. Then the sudden boom in mobile phones and mobile internet and the financial crisis. Total crash of the stock. Pretty much subsistence without any proper profits since '09-'10. Not enough IP to get bought, a few licensing deals here and there. Always falling rev…

I worked at TomTom in Amsterdam from 2007-2009, and had a fun time and learned a lot working with some smart people at a great company that treated us well and had good leadership.

But TomTom was just on the cusp of a small company turning into a big company.

And the savings and loan crisis was about to cause the economy to collapse.

Then TomTom got into a bidding war with Garmin over Tele Atlas.

So they ended up borrowing a whole lot of money at a really bad time.

Just as the iPhone was hitting the market, and Google and Apple were rolling out free maps and turn-by-turn navigation on smart phones that everybody already had.

I wrote about that earlier in the discussion about Etak:

https://news.ycombinator.com/item?id=13747015

DonHopkins on Feb 27, 2017 | parent | context | favorite | on: Who Needs GPS? The Story of Etak's 1985 Car Naviga...

"Etak eventually became a part of TomTom, ensuring that its map data, some of which was first digitized back during the Navigator's development in 1984, would live on to this day."

The story of how TomTom and not Garmin ended up owning the data originally digitized at Etak is interesting. At the time, there were only two digital map companies: Tele Atlas (from which TomTom got their map data) and Navteq (from which Garmin got their map data).

From Wikipedia [1]:

"On July 23, 2007, a €2 billion offer for the company by navigation system maker TomTom was accepted by the Tele Atlas board. This was then trumped by a €2.3 billion offer from United States-based rival Garmin on October 31, 2007 initiating a bidding war for Tele Atlas. TomTom responded by upping their bid to €2.9 billion, an offer which was again approved by the board of Tele Atlas. Garmin had been expected to counterbid once again: with Tele Atlas' main global rival Navteq subject to a takeover bid from Nokia, the company had stated that it did not wish both companies to fall into the hands of rivals. However, after striking a content agreement with Navteq through the year 2015, Garmin withdrew its takeover offer, clearing the way for TomTom. On December 4, 2007, TomTom shareholders approved the takeover. The European Commissioner for Competition cleared the takeover in May 2008, and it closed in June."

TomTom (where I worked at the time) was shocked and dismayed that Garmin outbid them by €300 million on Tele Atlas, because while it made a lot of sense for TomTom to buy their own map data supplier, it would have been prohibitively complex and expensive for Garmin, who used Navteq data, to switch map data sources and retool their entire map data digestion, distribution and error correction pipelines.

TomTom was so determined to buy Tele Atlas and keep it out of Garmin's hands, that they raised their bid by €900 million.

In the meantime, Garmin renegotiated their deal with Navteq, so they didn't have to pay as much for the data, and didn't have to switch map suppliers.

The stunt that Garmin pulled off was, in my opinion, an ingenious head-fake that cost TomTom an enormous amount of money, almost a billion euros, and at the same time saved Garmin a whole lot of money by enabling them to renegotiate a better deal with Navteq, who was faced with losing their major customer if they didn't lower their prices.

[1] https://en.wikipedia.org/wiki/Tele_Atlas

Re: TomTom to cut 10% of jobs due to improved automation

#35

Post by ghshephard »

wjnc wrote: post #20
dtech wrote: post #13

Earlier quoted context omitted.

They pretty much lost because free (subsidized) alternatives like Google Maps became available, pretty much the same story as Netscape. It probably didn't help that their maps were also incredibly expensive, €100-200 for western Europe in 2005 money.

Netscape disbanded as a company in 2003. Why is TomTom still here? I like the questions at the end of a company since a large market I work in (insurance / life insurance) is dwindling as well. What does that do with companies? How do they communicate? What happens when the inevitable shrinking sets in and your brain drain is faster than the way you shrink? Should you ever actively terminate a company and tranfer IP…

Small Nit - Netscape was broken up into pieces and sold to Sun Microsystems and AOL in 1999 for $10B. Thank Mike Homer for the great timing and resolve to get out while the getting was still good.

Re: TomTom to cut 10% of jobs due to improved automation

#36

Post by cerol »

wjnc wrote: post #6

TomTom is such an interesting story in technology and finance. Went from zero to $ 10B+ between '05 - '07 [1]. Everyone you knew had one, used one, loved one. Then the sudden boom in mobile phones and mobile internet and the financial crisis. Total crash of the stock. Pretty much subsistence without any proper profits since '09-'10. Not enough IP to get bought, a few licensing deals here and there. Always falling rev…

As a marathon runner, I know TomTom mainly for its sports watches. But I feel they've been fading away slowly. Garmin is still the champion in that area, but both must be taking a hit with all the cheap chinese knock offs. At the end of the day, you don't even need a high end sports watch unless you're a high end athlete. Reliable location tracking and good battery life is all you need, every other information can be derived thereof (avg speed, pace and distance). Only if you're into extreme activities you'll need something like a high end TomTom or Garmin (like 35+ km run in a hot day, or an Iron Man).

Re: TomTom to cut 10% of jobs due to improved automation

#37

Post by daniel_iversen »

belter wrote: post #14
wjnc wrote: post #6

TomTom is such an interesting story in technology and finance. Went from zero to $ 10B+ between '05 - '07 [1]. Everyone you knew had one, used one, loved one. Then the sudden boom in mobile phones and mobile internet and the financial crisis. Total crash of the stock. Pretty much subsistence without any proper profits since '09-'10. Not enough IP to get bought, a few licensing deals here and there. Always falling rev…

As the owner of several TomTom devices, who tried a smartphone and google maps as an alternative, my experience is that the maps are of higher quality and the navigation recommendations better. Multiple times, when in a Taxi in a foreign country, that used the usual solution of smartphone and Google maps, managed to get on time and find a tricky destination by popping up my trusted TomTom.

I really liked how TomTom's voice navigation was a lot more "vocal"/directive than Google, and for me that was a real benefit (maybe its niche, but they were at least differentiated there) but then some years ago (when they changed to a subscription service AFAIR) they changed the software and it was no longer "easier" to navigate with than Google (who had lots of other benefits incl. being free). Wonder if they have some sort of niche benefits as a navigation device now? Offline maps was good but Google's had that for a long time too.. Also, isn't Google and Apple Maps location tracking much more accurate in cities than TomTom devices because they don't just use GPS but also use cell tower triangulation as well as nearby wifi hotspot detection? And do people know (from their annual report) how much revenue comes from devices vs. licensing maps? (I'm sure device sales are close to non-existent compared to licensing deals)

Re: TomTom to cut 10% of jobs due to improved automation

#38

Post by snarf21 »

belter wrote: post #14
wjnc wrote: post #6

TomTom is such an interesting story in technology and finance. Went from zero to $ 10B+ between '05 - '07 [1]. Everyone you knew had one, used one, loved one. Then the sudden boom in mobile phones and mobile internet and the financial crisis. Total crash of the stock. Pretty much subsistence without any proper profits since '09-'10. Not enough IP to get bought, a few licensing deals here and there. Always falling rev…

As the owner of several TomTom devices, who tried a smartphone and google maps as an alternative, my experience is that the maps are of higher quality and the navigation recommendations better. Multiple times, when in a Taxi in a foreign country, that used the usual solution of smartphone and Google maps, managed to get on time and find a tricky destination by popping up my trusted TomTom.

Navigation is all about the DATA. If it worked better (or worse) in a certain location, it is solely because they have access to quality data. Quality data costs a lot. Companies like NavTech used to literally drive cars down the road (think Google street view cards) and capturing everything (speed limit, number of lanes, boundaries, etc.) but they were bought by Nokia a long time ago. Not sure what is what these days. You can get pretty good data these days by leveraging free government data and things like OpenStreetMap. Routing is quite simple with good data. The harder part is conversion to narrative directions. How many times have you been given instructions to "continue to stay on XX for 500 feet" only to be told to "stay straight to continue on XX"? (Source: Worked for MapQuest for many years)

Re: TomTom to cut 10% of jobs due to improved automation

#40

Post by racl101 »

justapassenger wrote: post #9
noasaservice wrote: post #2

Damn. And instead of reinvesting and furthering R&D, product lines, and more - they're just chopping 10% (or 450 people). That's a hell of a lot of institutional knowledge just gone. It also goes to show that when I automate, I should keep it hidden. That's because I do not receive the gains of automation. Instead, I receive more work or get laid off.

This sounds like they’re firing people who manually edit and fix maps. While it’s job that requires quite a bit of skill (my family member used to do that for other companies), those aren’t people you can redirect to R&D, at least not without heavy retraining. Real reason behind it, is IMO, preparing for recession and finding nice sounding reason for layoffs.

Yeah, they're probably keeping the people who allow them to automate and are laying off the people who, otherwise, need to do the work manually / semi-manually when there is no automation.

Anytime you automate something that someone is doing manually, and you're automating it so well, there's a good chance what you build might replace the people doing it.

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