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Report: RIM to Cut 2,000 More Jobs

Michelle Donegan
LR Mobile News Analysis
Michelle Donegan
5/28/2012

BlackBerry is poised to announce job cuts that will affect 2,000 staff, more than 12 percent of its workforce, according to a report over the weekend from Canadian newspaper The Globe and Mail.

Citing unnamed sources, the paper reported that the workforce reduction would be part of a new international restructuring program and that the number of job cuts could even exceed 2,000.

According to a Reuters report, RIM's job cuts could be as high as 6,000 and would affect employees across many different departments, including legal, sales, marketing and human resources. RIM has about 16,500 employees worldwide.

RIM CEO Thorsten Heins had noted on the last quarterly earnings call that the company was looking to streamline operations to achieve US$1 billion in savings by end of fiscal 2013. (See RIM Chairman Resigns After Bleak Q4 and RIM Reports Q4, Loses Execs.)

News of fresh job cuts would be another unpleasant summertime jolt for employees of the Canadian smartphone maker: RIM cut 2,000 jobs in July last year to reduce operational expenses. (See RIM Cuts 2,000 Jobs.)

Reports of job cuts and more restructuring at RIM come as the company struggles to cope with falling smartphone sales and a corresponding dip in market share while working hard to bring its new Blackberry 10 platform to market later this year.

Why this matters
Cost reductions and restructuring look inevitable for RIM given the company's market decline. But beyond that, the company also needs a more radical revamp to its smartphone strategy, which new CEO Thorsten Heins has not yet produced. If the restructuring announcement comes later this week, as reported, it needs to be accompanied by strategic changes that will show how RIM can improve its enterprise position as well as boost its standing with consumers. (See New RIM CEO: We Must Execute Better and RIM CEO Says No 'Seismic' Change Coming.)

For more



— Michelle Donegan, European Editor, Light Reading Mobile

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