TomTom Cuts 200 More Jobs on an AI Pivot That Hasn't Lifted Revenue Yet

TomTom, the Amsterdam-based mapping and location-data company, told investors on Thursday that it will cut around 200 jobs globally — roughly 6% of its workforce — as part of a reorganization meant to sharpen its focus on automated driving and AI-powered location intelligence. The company framed the move as a step toward becoming "more focused, faster, and more scalable," with plans to flatten management layers and extract about €21 million a year in savings once the cuts are complete by the end of 2026.

The announcement landed inside TomTom's third-quarter earnings release, and the timing mattered. Revenue for the quarter came in at €128.9 million, below the company's own consensus estimate of €131 million. Automotive demand stayed soft and enterprise revenue missed expectations too, according to ING analyst Marc Hesselink, who described the results as showing "continued weak revenue trends." TomTom's shares fell about 5% on the day — even though the company simultaneously raised its full-year operating margin guidance to roughly 4%, up from a prior 3% target, citing the lower salary costs the cuts will produce.

That combination — a stock drop despite improved guidance — is the clearest signal of how the market is reading the news: not as evidence that TomTom's AI strategy is paying off, but as an admission that it hasn't yet, and that cost-cutting is doing the work growth was supposed to do.

The second time around

This is not TomTom's first AI-branded restructuring. In mid-2025, the company cut around 300 jobs — about 10% of its then-larger workforce — in application-layer development, sales, and customer support, as part of what then-CEO Harold Goddijn called a shift to a "modernized technology stack" and a more "product-led" company built around AI. That round was also pitched as the move that would reverse a multi-year revenue slide driven by the collapse of standalone GPS devices and the rise of free smartphone navigation from Google and Apple.

Fifteen months later, TomTom is making a similar pitch with a similar tool. Current CEO Mike Schoofs told investors the company now expects a return to revenue growth only in 2027, and that AI-driven location-intelligence products will likely reach enterprise customers faster than they reach automakers, where adoption is slower and more cautious.

The cars still need to hit the road and show those capabilities.

Schoofs's comment, about automated-driving programs that are rolling out but have yet to prove themselves commercially, is a candid acknowledgment that the automotive side of TomTom's AI bet remains a bet — not a revenue line. It also underscores how much of TomTom's current workforce reduction is being financed by expectations about a market, autonomous and ADAS-linked driving features, that has not yet arrived at scale for the company's business.

TomTom has reorganized itself into three divisions — Automated Driving, Location Intelligence, and Navigation — and says it sees its strongest growth potential in the first two, both explicitly tied to AI. Navigation, the company's historical core business and the one most exposed to free alternatives from Big Tech, is being treated as the mature, shrinking segment funding the pivot.

A familiar pattern in a less-watched corner of the AI economy

TomTom's workforce has fallen from more than 4,500 employees at its 2019 peak to roughly 3,300 today, and the company has now trimmed headcount twice in less than a year and a half while invoking AI both times as the destination, not the cause, of the cuts. That distinguishes it from the more commonly covered pattern this year of large consumer and enterprise software firms citing AI efficiency gains as a direct substitute for headcount. TomTom's story is narrower and arguably more revealing: a mid-sized, publicly traded technology company repeatedly restructuring around an AI strategy whose commercial payoff keeps getting pushed a year further out, while its underlying business — demand for maps and navigation data — keeps eroding in the meantime.

The company is not alone in facing this squeeze. Mapping and location-data providers have spent a decade losing ground to in-house navigation stacks at Google, Apple, and increasingly automakers themselves; TomTom's answer, selling AI-enhanced location intelligence and automated-driving data to those same automakers, depends on convincing customers who could otherwise build the capability internally that TomTom's AI layer is worth buying rather than replicating.

For employees, the repeat cycle carries its own signal: a company that frames layoffs as forward-looking investment is, on a second pass within 15 months, harder to distinguish from one simply cutting costs to offset a business that has not turned around. TomTom has not disclosed which teams or geographies will absorb the newest 200 cuts, saying only that reductions will fall across management layers rather than a single division — a detail that, after last year's more targeted cuts to sales and customer support, suggests the belt-tightening is now reaching further into the organization than the first round did.

Whether 2027 brings the growth TomTom is now promising — or whether the company returns with a third restructuring before then — will be the real test of whether its AI pivot is a strategy or a holding pattern.