backtop


Print 25 comment(s) - last by sprockkets.. on May 29 at 4:32 PM

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



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

By wordsworm on 5/27/2012 4:06:25 PM , Rating: 1
Not to mention that they didn't have to steal IP from other software developers in order to put out their phones.

In other news, HP is also laying of thousands of employees in an effort to improve their profit margin. Does that mean that they're in trouble? I think these layoffs are more related to improving profit rather than a do-or-die situation. They're still making tons of money. What has happened is that the number of smart phones sold are much greater than they used to be. But, they still sell millions of phones just like they did before the iPhone came along, and then Android. However, because of the great growth of smart phones, it *looks* like they're selling fewer phones, but in reality, it's not as dire as what some writers or even RIM's board seem to think it is. RIM's board is disappointed that they couldn't maintain growth rather than remaining relatively steady. Some writers never seem to understand that. But, you know, once some writers have an opinion, they don't let facts get in the way.


By sprockkets on 5/28/2012 12:27:07 AM , Rating: 2
quote:
Not to mention that they didn't have to steal IP from other software developers in order to put out their phones.


What does that mean???


"If you mod me down, I will become more insightful than you can possibly imagine." -- Slashdot














botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki