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Tieto, a Finnish information technology service provider, on Thursday announced it would lay off employees after its key costumer Nokia decided to reduce purchases of their research and development services.
Tieto plans to cut 900 jobs around the world including 300 in Finland and 600 in Europe and Asia, as its "business volumes in product development services will decline due to the in-sourcing decision taken by one key customer," the firm said in a statement.
The jobs will be cut in phases over the next six months.
Tieto has a total of 14,000 employees in various parts of the world, of which 5,000 in Finland. The company's R&D division employs around 3,000 people.
According to Tieto, its product development services (PDS) represented 16 percent of the company's sales during the first half of 2014, and the key customer accounted for about 5 percent of total sales.
In the second quarter of 2014, Tieto's PDS sales declined by 24 percent, compared to the same period in 2013.
"Our customer has changed the way they make product development, which is why they will buy less R&D services from us in the future," Annti Vasara, director of Tieto's R & D services, was quoted as saying. Founded in 1968 and headquartered in Helsinki, Tieto operates in approximately 20 countries with net sales at 1.6 billion euros (2. 02 billion U.S. dollars).
