BlackBerry Maker Begins Its Final Descent with “Significant Layoffs” (RIMM)June 21, 2012 10:45 am ·
A new report from the Associated Press paints a bleak picture for the future of Canadian company Research In Motion. The makers of the once-prominent BlackBerry devices, RIM has spent the last year struggling to regain its former glory but has regularly come up short when it comes to satisfying market expectations. As a result, the company has been bleeding cash…and employees. After slashing 2,000 jobs a year ago, RIM is now poised to make even deeper cuts to keep the business afloat.
The cuts are hardly a surprise, though. Back in May, the company announced that “significant layoffs” were imminent, but nobody was quite sure how soon those layoffs would come. However, on Wednesday, that question was answered—at least somewhat.
Without giving a specific number, RIM announced that it had “reduced some positions as part of its program and may continue to do so as the company methodically works through a review of the business.” According to one analyst, Peter Misek, job cuts may well be in the 6,000 range. To put that into perspective, the RIM staff was 16,500 deep before the cuts were announced.
With a new operating system in the works—BlackBerry 10—Misek believes that the cuts are part of a larger strategy to move away from old practices and software in order to make the most of what may be RIM’s few finals breaths.
“They can’t jeopardize the company,” he insisted. “They have to give Blackberry 10 a number of shots. If they release a BlackBerry 10 device and it’s a good device, but it does OK, they’ll want to pull off an even better device shortly thereafter, and if you don’t have an appropriate cost structure you might wipe out your cash before you have an opportunity.”
As consumers continue to shirk the BlackBerry in favor of the iPhone and Android smartphones (maybe even Windows Phones?), RIM is losing what little ground (down to 10 percent of the U.S. smartphone market and still falling)—and cash—it has left. In fact, the latest round of layoffs is part of a larger strategy to hold onto an extra $1 billion of its fleeting reserves.
Reportedly equipped with “the multimedia, Internet browsing and apps experience customers now demand,” BlackBerry 10 seems to be the final all-in hand for RIM. If the OS fails, the company may not be too far behind as competitors continue pulling ahead, capturing market share along the way.
On the flip side, though, a revitalized Research In Motion would be a welcome addition amidst the increasingly slim selection that the Apple– and Google-dominated smartphone market has to offer.
Is Research In Motion fighting a losing battle, or will BlackBerry 10 give RIM a real shot at what would undoubtedly be a historic turnaround? Share your take in the comments below.
A couple days ago, The Verge put together a brief, hands-on video review of the BlackBerry 10’s keyboard feature: