RIM Lays Off
[Ed note: Actually, the gaggle said something like "heavy cash burn" or whatnot, but we paraphrased.]
RIM says it has a goal of chopping 10 percent of the company force, although it hasn't given an exact timescale for the cuts. The company says it employed around 2,200 people at the beginning of the month.
As a result of the reductions, RIM is anticipating a special pre-tax charge of between $8 million and $9 million in the third quarter of fiscal 2003. It estimates longer-term savings from these measures to be approximately $20 million to $25 million per year. The savings are expected to begin in the fiscal fourth quarter, with "the full impact" of savings realized in the following first quarter.
Despite the fact that RIM has been feeling the effects of the general slowdown in IT spending for a while (see GRIM for RIM), it must be particularly galling that these layoffs come just after the announcement of a major licensing deal with Nokia Corp. (NYSE: NOK) (see RIM's Big Score) -- although it is unlikely that RIM will see any royalties from that deal until later next year.
— Dan Jones, Senior Editor, Unstrung www.unstrung.com