RIM to layoff 2000 employees

Mon, Jul 25, 2011


Things continue to look bleak for RIM. The Canadian based handset maker announced today that it plans to slash 2000 jobs to help reduce costs and redouble its efforts to remain relevant in the smartphone market and make a dent in the burgeoning tablet market. Indeed, RIM explained that the job cuts, while regrettable and the company’s first in over a decade, are a “a prudent and necessary step for its long-term success.”

2000 jobs is about 11% of RIM’s workforce, and the job cuts highlight the company’s struggles to shift midstream and transition from a company renowned for its email devices into a company that can compete with modern day smartphones like the iPhone and the Droid X.

These layoffs constitute the the latest in a string of bad news for RIM. Back in June the company released disappointing earnings results for its first fiscal quarter. While revenue was up 16%, overall EPS and net income were down from the same quarter a year-ago.

At the time, RIM co-CEO Jim Balsillie explained that the company is having trouble in new markets and getting new products up and out the door.

Fiscal 2012 has gotten off to a challenging start. The slowdown we saw in the first quarter is continuing into Q2, and delays in new product introductions into the very late part of August is leading to a lower than expected outlook in the second quarter.

And speaking of Jim Balsillie, you might remember a string of anonymous manifestos from RIM executives and employees lampooning the company’s leadership at the top, the vision of its executives, and its inability to even appreciate where the tech landscape is moving.

Picture yourself sitting in an executive briefing at Research In Motion. You’d hear Mike Lazaridis unequivocally state time and time again that BlackBerry smartphones would never have MP3 players or cameras in them because it just does not make sense when the company’s primary customers were the government and enterprise. “BlackBerry smartphones will never have cameras because the No. 1 customer of ours is the U.S. government,” Mike Lazaridis would say in meetings. “There will never be a BlackBerry with an MP3 player or camera.”

The fact is, that RIM didn’t only miss the boat in terms of product features and device trends as we now know, but the underpinnings of the company’s consumer failure began all the way back in 2005 with bold statements like these, combined with a lack of research and development in numerous key areas.

via Reuters


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