RIM to cut 2,000 jobs

BlackBerry maker cuts 11 percent of workforce, shakes up management to contend with strong smart phone competition.

Comments Off on RIM to cut 2,000 jobs July 25, 2011
by Canadian Press

Research In Motion says it will cut about 11 per cent of its workforce this year, eliminating 2,000 jobs worldwide in an effort to save money amid an increasingly competitive smartphone and tablet market.

The job cuts are the largest in the Canadian technology icon’s history and come after several years of rapid global growth and expansion.

“The workforce reduction is believed to be a prudent and necessary step for the long-term success of the company,” RIM said in a statement before stock markets opened for the week. “It follows an extended period of rapid growth within the company whereby the workforce had nearly quadrupled in the last five years alone.”

Waterloo-based RIM currently has about 19,000 employees across its operations so the latest cuts amount to 11 per cent of the workforce, much of which is located in southwestern Ontario where the company started.

Employees based in North America will begin to receive their notices this week, while those in most other countries will be told at a later date, the company said.

Any severance payments or other charges related to the job cuts are not included in RIM’s second-quarter and full-year outlook.

The job cuts come as RIM faces off against a host of new competition in the smartphone market with the emergence of Apple’s iPhone and smartphones with Google’s Android operating system. The flurry of recent competitors has hurt its share in the important U.S. market.

RIM’s PlayBook tablet, which met expectations of selling 500,000 in the recent quarter, has received lukewarm reviews compared with Apple’s iPad.

The company responded by launching a plan to reduce its costs, and started with a small number of layoffs in its hometown. RIM laid off an estimated 200 employees in Waterloo in late June, though the company declined to confirm the number.

RIM said it expects to provide more information on the latest round of layoffs when the company reports fiscal second-quarter results Sept. 15.

In early trading on the Toronto Stock Exchange, RIM’s shares were down 60 cents, or 2.3 per cent, at $25.87

The technology company is also making changes to its executive lineup that will give more responsibilities to certain people.

Former Siemens Communications executive Thorsten Heins will take an expanded role of chief operating officer that includes all product engineering functions.

His broader responsibilities come as the company announces that COO Don Morrison plans to retire after taking a temporary medical leave last month.

The company said that Heins’ new role “is expected to both produce greater efficiencies and help to accelerate new product introductions in the future.”

Chief information officer Robin Bienfait will handle the expanded responsibility of overseeing the business enterprise unit.
© 2011 The Canadian Press