Digia announces change negotiations, illustrating natural need for adaptation

Translation: Original published in Finnish on 2/27/2026 at 9:11 am EET.

Digia announced on Friday morning that it would initiate change negotiations in some of its Finnish units to respond to the changed demand in the IT services market (link to the release). The negotiations involve approximately 300 employees, and the company estimates the need for redundancies to be a maximum of 50 employees. In our view, the adjustment measures are a logical continuation of the company's new strategy period, the initial phase of which emphasizes operational renewal and efficiency improvement. The targeted annual savings of 2-3 MEUR from these measures support our earnings estimates for the current year and the company's goal of increasing profitability towards an EBITA margin of over 12% by the end of the strategy period. 

Adjustments address soft demand in certain service areas

The change negotiations are due to the current market situation in the IT sector, which has led to weakened customer demand for Digia in certain service areas. Similar precise adjustment measures were also seen last year in the Managed Solutions unit, where the company aimed for savings of around 2-2.5 MEUR. Digia has grown to a size and has such a broad service offering that, inevitably over time, there will be areas where demand declines (driven by market changes or technological developments). In such cases, change negotiations are unfortunately a natural and often the only option. Tieto Plc has operated with the same logic for ten years.

The now announced need to reduce 50 employees corresponds to approximately 3% of the company's total workforce of about 1,600 employees. The targeted annual savings of 2-3 MEUR support our forecast of an adjusted EBITA of 23.2 MEUR for 2026. One-off costs arising from the negotiations will be recognized in H1’26, which will slightly depress the reported result.

Strategic growth investments continue alongside efficiency improvements

Despite the adjustment measures, Digia continues its strategic investments in AI, service productization, and international growth. This is in line with the company's recently published strategy for 2026-2028, where the theme for the first year is specifically operational renewal. In our view, the company's ability to react quickly to changes in market demand is essential to maintain its profile as a "stable earnings machine" and to achieve its profitability targets in a challenging market environment. Digia aims to achieve over 10% annual growth and an EBITA margin of over 12% by the end of the strategy period. Our current forecast for 2026 revenue growth is 3.9% (225.5 MEUR) and for the EBITA margin is 10.3%. The release does not necessitate updates to our forecasts, and we will add our estimated one-off expense of just under 0.5 MEUR to our forecasts in connection with the next update.