RIM trims 2000 jobs and moves management around

RIM trims 2000 jobs and moves management around
RIM has been given six months by shareholder representatives to show that the co-CEO setup will show results, affecting the bottomline positively, and seemingly the first round of measures is underway.

The company just announced it will scale down workforce with about 11% of its employees, or about 2000 job cuts. The severance package that the workers sacked by RIM are expected to receive is not reflected in its quarterly and annual outlook. RIM will also reshuffle some layers of management, but Mike Lazaridis and Jim Balsille will continue to run the company in tandem.

Even though payout to leaving employees is usually nothing to sniff at, such moves usually bode well for the stock price with Wall Street, since they save a lot more operating expenses further down the road, so we expect a nice bump in RIM's share price today.

RIM trims 2000 jobs and moves management around
RIM has been struggling to keep up with the pressure from iOS and Android smartphones for a year now, although it's far from being completely marginalized - its ASPs are among the highest in the industry, and the company still enjoys healthy profit margins from its BlackBerry handsets, as you can see in our financial article here and on the chart left.

A bit of corporate restructuring, and, most importantly, some new and exciting handsets should go a long way this and next year for RIM. What do you think?

source: Reuters

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9 Comments

1. snowgator

Posts: 3614; Member since: Jan 19, 2011

Yep, everyday work force is being let go by only the two men who really should be let go. Irony is so ironical. Yes, this will buy Twiddle-Dee and Twiddle-Dum some time. But, it won't solve the overall problem of RIM being unable to compete in the consumer mobile market. While they will always be a factor among buisness, they cannot find a way to make their strengths (solid hardware, great reception, security) translate into anything iOS, Android, and now W7 users do not already get, and get a lot better. They either need new managment with help from an outside source for their software, or they need to move into a strict "buisness only" approach that they excell at anyways and protect that market like rabid dogs. This is nothing surprising, but it is a good read from the BGR web site. http://www.bgr.com/2011/07/13/rims-inside-story-an-exclusive-look-at-the-rise-and-fall-of-the-company-that-made-smartphones-smart/

2. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

In 6 months, it will be all over for RIM. Their current crop of 'new' handsets have already been obsoleted by Apple and Android manufacturers. No one in the consumer smartphone segment wants to buy last years product today and lock into a 2 year contract. Expect further market share loss for RIM as contracts expire and consumers move on to Apple and Android. In 6 months, it will be time to find a merger partner for RIM.

3. vzwbb21

Posts: 33; Member since: Jun 05, 2010

RIM is not going under. People underestimate the size if the company. They are a huge company and innovators. Maybe in the past 2 years they haven't been, but they were the first to put a 624 mhz processor in their phones. They were the first to put an awesome messenger app on their phones. They were the first to a lot of innovations that other companies copy, mostly motorola and maybe nokia. BlackBerries have the best keyboards, best build quality, best reception, and most of all, relating to build quality, they never break when you drop them. All they need to do is just look at the products being developed now, and make devices that are going to compete in the future, not the present.

4. ngo2dd

Posts: 896; Member since: Jul 08, 2011

And RIM design of their headset are boring and all the same. That is why they are losing market share

5. redleg6

Posts: 25; Member since: May 14, 2011

You clearly haven't had any dealings with the Storm or Storm 2. Horrible handsets.

6. PhoneLuver

Posts: 481; Member since: Jul 05, 2010

Best reception? Ever have that "Dee Dee Dee" sound at full volume in your ear? I'm ttill looking for the guy that decided that was a good idea! :-s

7. PhoneLuver

Posts: 481; Member since: Jul 05, 2010

I do agree with you however that they are a huge company and perhaps more robust than people might assume. Many people in developing markets are jumping on the Blackberry bandwagon. These are mainly former Nokia and cheap Samsung owners that are looking for something a little "smarter", but can't afford a high-end Android or iPhone. Considering the price range people are looking at, Blackberry is perfectly positioned to absorb those customers. Low end Androids are pretty much useless and the iPhone is too expensive, Nokia is dead, so who's left? Only thing RIM should do now, is to reduce the cost of their handsets!

8. cornerofthemoon

Posts: 619; Member since: Apr 20, 2010

I really enjoyed my last Blackberry Curve, but in the end, the processor was just too darned slow. If RIM can just up the horsepower, they may have a chance.

9. Humpty Dumpty unregistered

You ever see a fat egghead fall off a wall? Stick around, you might see two of them fairly soon.

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