Monday, July 25, 2011

RIM to Cut 2,000 Jobs on BlackBerry

Research In Motion Ltd., maker of the BlackBerry smartphone, plans to cut 2,000 jobs, or about a tenth of its workforce, as sales slow amid market share losses to Apple Inc.’s iPhone.
The reductions, across all functions, are part of a plan to “focus on areas that offer the highest growth opportunities,” RIM said today in a statement. The job cuts will leave the Waterloo, Ontario-based company with about 17,000 employees.

RIM predicted last month that quarterly revenue may drop for the first time in nine years. The company is losing market share in the U.S. to Apple’s iPhone and handsets running Google Inc.’s Android software, in part because it hasn’t introduced a major new BlackBerry model since August. Cheaper Google phones are also making inroads in Latin America, Asia and Europe, threatening the popularity of less expensive BlackBerry models like the Curve.

RIM fell as much as 76 cents, or 2.7 percent, to $27.15 in early trading after closing at $27.91 in Nasdaq Stock Market trading on July 22. The stock had dropped 52 percent this year before today.
The company said any charges associated with the job cuts including severance packages aren’t included in its forecasts for the current quarter and fiscal year. RIM will give details on the financial implications of the job cuts when it reports fiscal second-quarter results Sept. 15.
The company also gave new responsibilities to senior managers and said that Chief Operating Officer Don Morrison, currently on medical leave, plans to retire. RIM named Thorsten Heins to the expanded role of COO for product and sales, overseeing product engineering, hardware and software, and Jim Rowan is now COO for operations.
RIM appointed Patrick Spence as managing director of global sales and marketing. Chief Information Officer Robin Bienfait will also oversee RIM’s enterprise business.

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