RIM Job Cuts Could Reach 6,000, Bad News Continues for BlackBerry Maker
RIM needs BlackBerry 10 to save it, when it arrives later this year—but will that be too late? Facing iPhone 5 and other big launches, analysts say they’re remaining "cautious" about RIM’s prospects.
BlackBerry maker Research In Motion knows that things are going to get far worse before they can get better. Analysts might be quick to add, if they get better.
RIM management has said it expects soft results for the next few quarters, as well as an operating loss for the May quarter that analysts with Canaccord Genuity, in a May 30 report, said is well below their 5.4 percent operating margin estimate.
RIMs fiscal 2013 first quarter ends June 2. By June 1, the company is expected to begin a round of layoffs that could include 2,000 jobs, The Globe and Mail reported May 26.
Reuters, citing a person familiar with the matter, said the staffing reductions could affect as many as 6,000 people in RIMs legal, marketing, sales, operations and human resources divisions.
During a March 29 earnings call, RIM CEO Thorsten Heins outlined his plan for keeping the sinking company afloatif not resurrecting it to its former glory, as he said was his intention at RIMs BlackBerry World 2012 event in Orlando a month later. The plan, said Heins, includes refocusing resources on RIMs key opportunities; implementing programs for greater employee accountability and efficiency; and selling as many BlackBerry 7 handsets until RIMs real white knightthe BlackBerry 10 platformarrives toward the end of the year.
In our evaluation of the organization structure, we have identified a level of complexity that is not conducive to the efficient operation of our business, Heins said during the call.
He went on to explain a CORE plana companywide initiative to drive improvements and efficiencies across all functions of the organization. The target of CORE, he added, is to drive $1 billion in savings by the end of fiscal 2013 based on our current run rates.