May 29, 2012

RIM Facing More Workforce Elimination

Lee Rannals for

Research In Motion is planning to make some business moves by eliminating 2,000 jobs, according to a report by Canada's Globe and Mail newspaper.

The report said the next round of layoffs will be this Friday, June 1, which is the day before the maker of the BlackBerry reports its first financial quarter ends.

Reuters reported that the layoffs could hit as many as 6,000 people and affect legal, marketing, sales, operations, and HR operations.

"The strategic question is: are you accelerating into a better future or shrinking to a niche operation?" the unnamed source told Reuters.

RIM is struggling to find its foothold in both the smartphone and tablet market, as companies like Apple and Google continue to dominate the industry.

The company is planning to launch a new operating system for its BlackBerry phones in the fall in an attempt to regain some lost market share.

RIM's PlayBook tablet launched a year ago and has hit the ground walking, costing the company billions in inventory and write downs.

Its stock dropped to an eight-year low last Thursday to $10.59, which is down from $60 in February 2011.

RIM has been getting rid of senior managers since Thorsten Heins took over as the company's new chief executive officer in January.

“They´ve been axing people on the sly for months,” one former RIM executive told the Globe and Mail. “Lots of guys are being packaged out right now.”

Heins told the Globe and Mail that the past few months have allowed him to fully explore the breadth of the company, including parts that he was less familiar while he was acting as chief operating officer.

“It kind of allowed me to get a clearer view of what fits, and what doesn´t fit,” Mr. Heins told the news agency back in late April. “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.”

Before the smartphone boom, and competition became tighter, RIM's workforce was at a capacity of over 20,000.

RIM laid off 2,000 staff last summer, and closed off fiscal 2012 on March 3 with a low 19 percent drop in sales.