Share of Research In Motion (RIMM) are up this morning on reports that the Canadian company is preparing to lay off thousands of employees. Executives at the struggling maker of BlackBerry smartphones and tablets have said in the past that they hope to cut costs by up to $1 billion this year, and now the Canadian Globe and Mail says layoffs will be announced next month.
RIM employs roughly 16,500 people, and the Canadian daily reports that about 2,000 employees (12% of the total workforce) are slated to be let go. A subsequent Reuters report said that as many as 6,000 people (36% of the workforce) could be asked to leave.
RIM lost $125 million during the fourth quarter and is set to release its first quarter earnings June 28. After missing analysts’ estimates significantly last quarter, RIM said it will no longer offer financial guidance to the investment community ahead of its earnings reports.
“While the company has pulled financial guidance, we nevertheless want to highlight that the May and August quarters will be especially difficult as emerging market carriers begin to embrace the iPhone and low-cost Android devices,” says Kevin Smithen of Macquarie Capital USA. “Only patient value or event-driven investors should be involved with RIM at this point.”
RIM said today that chief legal officer Karima Bawa will leave the company. Bawa had announced her intention to retire some time ago. Less expected was last week’s announcement that sales chief Patrick Spence will leave the company.
RIM’s BlackBerry phones have been steadily losing market share to iOS and Android smartphones. IDC reports that BlackBerry had just 6.4% of the smartphone market in the first quarter, down from 13.6% a year ago.
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Can’t teach an old dog new tricks. RiM needed some fresh talent to revive the product, but instead they kept throwing money into the old an unfixable.
Its their own fault for thinking that business world is hooked on Blackerry.
They got too confortable. Meanwhile, every phone manufacturer was surpassing them blazing by.
RIM are pitching their whole company hopes on BB10 which is a mistake. RIM’s whole approach to the operators is completely wrong they need a new business model. They have lost sight of who the customer is, I will be surprised if RIM are still here in 5 years in the current.
RIM is at long last starting to pay off for its arrogance of the past 10 years! I worked for many years for a mobile operator in Europe, in a team responsible for purchasing handsets, including RIM’s, and the attitude from this company was simply unbelievable.
The only sad thing is that, it will be most probably ordinary employees paying for the arrogance of their management…
It is very sad to see the iconic giant fall so easily, they took the smartphone industry to new level in there years gone, but because of becoming complaisant in a ever volatile market the were left behind.
Advisably the need a newer fresh outlook to the market wants, make their OS more AI interactive, a whole revamp of its phone line will help.
There is enough talented people out there to make the brand come alive.
Thanking you.
Regards,
Surindra
While the previous comment is very true, I also blame the media for actively leaning on the poor performance of the company. This happens when any company has rough times. The media gets a story and makes the problem ten-fold. Yes, we need to know, but how much is too much?
I find, too often, that the media only projects part of the story with their bits and bites.
Hopefully RIM has a secrete weapon on the horizon, and if they do, now would be the time to announce upcoming products (in the sense of a generic announcement)