RIM Issues a State of the Union Address
Published: 05/30/2012 10:01:18 AM EST in Appointments & Business
In the midst of high-ranking Research In Motion (RIM) employees submitting their resignations and rumours about massive job cuts swirling around, company President and CEO Thorstein Heins has issued a business update.
At the outset of the note, Heins begins by noting that although RIM is no longer providing quantitative financial guidance, he felt as if it was time to offer some details about where the company is at, ahead of reporting its Q1 2012 results, for the period ended June 2.
He says that RIM is going through “a significant transformation” as it moves towards its BlackBerry 10 launch and that the company’s “financial performance will continue to be challenging for the next few quarters.” He added that the continuous competitive environment is impacting RIM’s business, in the form of lower volumes and “highly competitive pricing dynamics in the marketplace.” Heins expects the company’s Q1 results to reflect this and warns that such circumstances will likely result in an operating loss for the quarter.
“On the positive side,” he adds, “we expect to further increase our cash position in Q1 from the approximately US$2.1 billion we had at the end of fiscal 2012.”
Heins was also quick to boast about the recent hirings of Kristian Tear (COO) and Frank Boulben (CMO), and acknowledge that RIM’s CORE (cost optimization and resource efficiency) program is in full swing and focused on “delivering key operational saving through various initiatives.” The financial objectives for the program, is to drive US$1 billion in savings by the end of fiscal 2013.
He says that RIM is “targeting better efficiency and use of resources” in its sales and marketing initiatives, while continuing to review the company’s organizational structure and “clearly define accountabilities for all key businesses and business processes with the goal of eliminating fragmentation, duplication and inefficiencies.”
To his credit, Heins didn’t shy away from the heavily observed RIM personnel issues, by saying “While there will be significant spending reductions and headcount reductions in some areas throughout the remainder of the fiscal year, we will continue to spend and hire in key areas such as those associated with the launch of BlackBerry 10 and those tied to the growth of our application developer community.”
As of the time of this writing, RIM stocks were down to $10.39 apiece.
RIM will be reporting its Q1 2012 results on June 28