RIM Takes Huge Loss, Lays Off 30% of Workforce, Delays BB10 Until 2013
June 28, 2012 5:15 PM
Is this the end?
predicting a small loss
from embattled Canadian smartphone maker Research in Motion, Ltd. (
); a loss that they concluded would drive the company closer to a likely sale in 2013. But the analyst consensus of a $0.03 USD per share loss on $3.1B USD revenue went from seeming gloomy, to seeming downright flowers and roses compared to RIM's
I. RIM Reports Horrifying Financials
[PDF] an abysmal $2.8B USD in revenue an a lost of $0.30 USD per share. The loss is RIM's
second straight quarter
of escalating money bleeding.
RIM, which employs approximately 16,500 people worldwide, also committed to layoffs of 5,000 employees, or roughly 30 percent of its workforce. That will leave RIM with just over 10,000 employees globally -- about half of its peak workforce of 20,000 in 2009.
RIM is laying off almost a third of its employees. [Image Source: BGR]
The jobs cuts were much worse than
-- 2,000 layoffs. RIM had
announced that layoffs
would indeed be coming weeks ago, but it held off on sharing exact numbers. It's unfortunate to see exactly how deep RIM is cutting to try to save the ship, but it's perhaps understandable given how much worse than expected the financials were.
While RIM clings to a dwindling number of large enterprise users, the root of its problem was plunging sales of BlackBerry smartphones. RIM mustered only 7.8 million units sold, down over 40 percent from last year's
[PDF] (13.2 million). Sales of the PlayBook tablet plunged to 260,000 amid RIM's
cut of its most popular SKU
. That marks almost a 50 percent drop from last year's sales of 500,000 units.
Ex-RIM CEO Mike Lazardis's 2009
during the peak of RIM's success is looking more and more like a warning to future CEOs on the perils of mismanagement -- "Sometimes we have to put the brakes on. We've shown that we can handle annual 100% growth. I'm not sure we could handle more than that."
Every part of RIM is shriveling and dying, from its
its business user-base
, to its
II. BB 10 Gets Delayed, End is Nigh for RIM
But that's not even the bad news. RIM also offered this jewel in its earnings report:
BlackBerry 10 smartphone launch now scheduled for Q1 of calendar 2013.
In other words, everyone's favorite
vaporous smartphone platform
has been bumped yet another half year.
BB10 has been bumped to 2013 -- if RIM makes it that long. [Image Source: NeoWin]
To put this in context, RIM bought QNX in April 2010, with the intention of using it as a replacement for its current smartphone operating system. In a market that moves like lightning RIM's fumbling executive ranks have managed to take nearly 3 years to turn this gifted wrapped platform into product. In other words, what should have been a chip shot was turned into a Hail Mary due to pure,
RIM over the last year has made a sad joke of itself, with its
faked "flash mob" protests
at Apple, Inc. (
) stores in Australia and its new chief executive's
on the world's most used smartphone platform, Google Inc.'s (
) Android. Apparently somewhere along the way RIM forgot that Google and Apple each and every year deliver something that it does not -- actual
Or perhaps RIM was too busy courting business users with
Saturday morning cartoon characters
Analyst predict more destruction for the RIMdenburg.
[Image Source: Jason Mick/DailyTech LLC]
Regardless, if there's one thing that's clear it's that a
sale of RIM
is likely coming soon. It seems unlikely that RIM will survive to see its ever-slipping operating system arrive.
Investors will surely be eager to
salvage what little they can
from the company. The company does have some decent assets -- namely its large intellectual property portfolio, its recognizable business brand, and its superb physical keyboard mastery.
It would be relatively shocking if RIM is not put
on the auction block
before the year's end.
"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997
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