RIM shares fall as job cuts begin at BlackBerry maker
Wed Jun 20 2012
TORONTO — BlackBerry maker Research in Motion Ltd. has begun cutting jobs in a bid to save $1 billion.
The company said Wednesday that it’s looking for at least $1 billion in savings by the end of its 2013 financial year and job cuts are part of that plan.
“RIM has reduced some positions as part of this program and may continue to do so as the company methodically works through a review of the business,” the company said in a statement.
RIM — which did not provide specific numbers regarding the cuts — is expected to provide a business update when it reports its first-quarter results on June 28.
On Monday, contract electronics manufacturing company Celestica Inc. said it would be winding down its manufacturing services for RIM as the struggling BlackBerry maker looks to cut costs.
Celestica said it would end manufacturing services for RIM over the next three to six months.
RIM shares were down 52 cents or about five per cent at $10.44 in trading on the Toronto Stock Exchange on Wednesday.
In addition to its main base in Waterloo, Ont., RIM also has a customer service centre in Halifax that services users in Canada, the U.S. and South America.
Other smaller offices are based in Mississauga, Ont. and Ottawa where they have been combined with staff of QNX Software Systems, the company that designed the operating system behind the PlayBook and the next generation of BlackBerry devices.
Outside of Canada, RIM has operations in various places including Texas and the United Kingdom.
The job cuts had been widely anticipated since CEO Thorsten Heins announced last month that the company would reduce its staff by an unspecified number of jobs to save $1 billion.
Advance estimates on how many jobs would be lost ranged wildly from 2,000, or about 12 per cent of its workforce, to 5,000, or about 30 per cent.
Last July, RIM laid off about 11 per cent of its workforce, or 2,000 employees, marking the biggest employee reduction in its history.
Since then, the company has made significant changes in its executive ranks, including the exit of co-CEO Jim Balsillie and the reduction of the role played by co-founder Mike Lazaridis. Other lower ranking executives have also been replaced.
RIM has been working to turn around operations after watching its market share eroded by the growing popularity of Apple’s iPhone and smartphones running Google’s Android operating system.
The company hopes the debut of its BlackBerry 10 operating system and a new line of BlackBerry smartphones will help keep its subscribers from defecting to other devices, particularly in the United States.
However, speculation has been growing that RIM’s efforts are too little too late, and that the BlackBerry maker could ultimately be sold off. In late May, the company said it had hired J.P. Morgan Securities LLC and RBC Capital Markets to evaluate various strategies, including potential partnerships and licensing.