RIM cuts 2,000 jobs. Can the company bounce back?(Read article summary)
RIM announces a 10.5-percent workforce reduction plan, and says it will retune its corporate strategy.
Research in Motion, the manufacturer of the BlackBerry line of handsets and the PlayBook tablet, today announced it would slash approximately 2,000 jobs worldwide. The scale of the layoffs – about 10.5 percent of its workforce – exceeded many analyst expectations. In a press release, RIM reps said the layoffs would allow the company to "eliminat[e] redundancies" and rejigger internal strategy.
"The workforce reduction is believed to be a prudent and necessary step for the long term success of the company and it follows an extended period of rapid growth within the company whereby the workforce had nearly quadrupled in the last five years alone," RIM reps said. Affected employees in North America and "certain other countries" will be notified this week, while the "remainder of the global workforce reductions will occur at a later date," the reps added.
These have been grim times for RIM. Although the company still remains a force on the smartphone market – and will likely remain a force for years to come – recent product launches, such as the new BlackBerry Bold or the BlackBerry PlayBook, have failed to elicit much enthusiasm from critics, let alone consumers. Meanwhile, pressure from Apple and Android continues to mount.
"Fiscal 2012 has gotten off to a challenging start," Jim Balsillie, Co-CEO at Research In Motion, said in a statement back in June. "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." Cue the layoffs, and the sinking stock prices, and the general mood of pessimism among analysts.
Over at CNET, Roger Cheng blames the RIM travails on a top-heavy corporate structure, which plenty of executives, and not a lot of innovative to show for it. "You've seen the consequences over the past few years: frustratingly slow innovation, shrinking market share in its core North American market, the lack of a new smartphone in nearly a year, and a half-baked tablet panned by critics," Cheng writes this week.
Do you agree? Drop us a line in the comments section. And sign up for the new BizTech newsletter, arriving via e-mail each Wednesday.