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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