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RIM's workforce has shrunk by over a quarter in the past three years

Waterloo, Ontario based Research in Motion, Ltd. (TSE:RIM) used to be the darling of the smartphone industry.  For a time "BlackBerry" was almost synonymous with "smartphone", but today RIM has fallen on hard times.  It can hardly convince customers to buy its smartphones, let alone its flopped tablet, despite the price being slashed from $500 USD to around $200 USD.

Desparate times call for desparate measures, and a report in top Canadian newspaper Globe and Mail indicated this week that RIM would be axing 2,000 jobs worldwide, from its roughly 16,500 workers.  That 12 percent reduction in workforce is a sign of just how dire things are for the phonemaker, who is facing the prospect of a sale or bankruptcy.

An anonymous executive told The Globe and Mail, "They’ve been axing people on the sly for months.  Lots of guys are being packaged out right now." an executive is quoted as saying."

At its pinnacle around 2009, RIM employed over 20,000.  With the latest cuts, RIM's global workforce will have shrunk by almost 28 percent.

The layoffs are expected to begin June 1, a day before RIM announces its latest fiscal quarterly results -- which some fear will be another loss.  Some employees are expected to be pressured to take early retirements and buyout incentives, others will be directly laid off.

The cuts could save RIM $1B USD, but that could be a short term solution, given that the company lost $125M USD (an eighth of a billion) in Q1 2012, and many expect those losses to accelerate as sales shrink.

RIMdenberg
Some fear the cuts won't be enough to save RIM. [Image Source: Jason Mick/DailyTech LLC]

Worldwide the BlackBerry accounts for only 7 percent of smartphone shipments, according to market research firm IDC Group.  And in the U.S. RIM's market share is at about 4 percent -- indicating that a mere one in every-twenty-five devices sold is a BlackBerry.

New CEO Thorsten Heins compares recent layoffs and executive departures to throwing out pieces of a puzzle -- pieces he says you "don't need".  He comments, "[Reviews] kind of allowed me to get a clearer view of what fits, and what doesn’t fit.  Think of it like a jigsaw puzzle. I kind of figured out a few pieces that I don’t need in my puzzle to be successful."

Analysts widely believe RIM's only hope at survivial is its upcoming BlackBerry 10 operating system, but many are pessimistic regarding whether BB10 will be enough to save the sinking devicemaker.

Source: The Globe and Mail





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