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RIM to cut 30% of its workforce, delay BB10

Research in Motion (RIMM) says its new BlackBerry 10 smartphone will not be available until early 2013, and that by that time 5,000 of its employees will have lost their jobs. The Canadian company is awash in red ink, and says the development of the BlackBerry 10 platform is “more time consuming than anticipated.”

But time may be running out for the Canadian company that once dominated the enterprise market for smart devices. Five years after the launch of the iPhone, RIM is facing the prospect that it may not be able to stay in business until its newest smartphone hits the market. Sales of its existing products are slipping. RIM said it shipped 7.8 million BlackBerry handheld devices in the most recent quarter, down from 11.1 million during the first three months of the year.

RIM lost $518 million in the most recent quarter, after losing $125 million during the previous quarter. The company has said in the past that it needs to cut costs by $1 billion this year, so layoffs had been expected. However, most analysts had not realized that the losses or the layoffs would be this severe.

Speaking to analysts yesterday, RIM CEO Thorstein Heins repeatedly emphasized the value of the BB 10 platform, and the company’s determination to get it right. “We’re aiming for nothing less than being a viable, successful, mobile computing platform of the future. This is what we’re aiming at. And I think that’s the difference. If you compare us with others, did we take the hard road? Absolutely. Absolutely. But having done this and building and completing this new mobile computing platform that then expresses itself as a smartphone or as a tablet or as a vertical application or embedded in cars, whatever you want to do, that is where we will take BlackBerry.”

Henis’ determination to creat a “mobile computing platform of the future” could make him hesitant to let RIM jump into the arms of a savior like Microsoft. But Heins did say that “the teams are working together on evaluating strategic options in various dimensions… they range from RIM executing on its plan, stand-alone, to whatever other model you could think about.”

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ABOUT AUTHOR

Martha DeGrasse
Martha DeGrassehttp://www.nbreports.com
Martha DeGrasse is the publisher of Network Builder Reports (nbreports.com). At RCR, Martha authored more than 20 in-depth feature reports and more than 2,400 news articles. She also created the Mobile Minute and the 5 Things to Know Today series. Prior to joining RCR Wireless News, Martha produced business and technology news for CNN and Dow Jones in New York and managed the online editorial group at Hoover’s Online before taking a number of years off to be at home when her children were young. Martha is the board president of Austin's Trinity Center and is a member of the Women's Wireless Leadership Forum.