BlackBerry maker RIM axes 2,000 jobs
Waterloo, Ont.-based Research In Motion plans to cut about 2,000 jobs, the company announced Monday.
Once Canada's high-tech darling, the BlackBerry maker is cutting about 11 per cent of its global workforce.
"The workforce reduction is believed to be a prudent and necessary step for the long-term success of the company and it follows an extended period of rapid growth within the company whereby the workforce had nearly quadrupled in the last five years alone," RIM said in a statement.
After the jobs have been eliminated, RIM will employ 17,000 people worldwide.
The company's first-quarter profits plunged 10 per cent, its market share fell nearly five per cent in three months and its stock price dropped in half in 2011. RIM shares were down roughly two per cent to about $26 on the TSX on Monday.
RIM laid off roughly 200 people in the days following its last earnings report at the end of June. Most were in the Kitchener-Waterloo area and worked in manufacturing.
The new layoffs will be worldwide.
Layoffs begin this week
Employees based in North America will begin to receive their notices this week, while those in most other countries will be told at a later date, the company said.
Any severance payments or other charges related to the job cuts are not included in RIM's second-quarter and full-year outlook.
Business analysts have speculated part of those losses can be attributed to RIM's failure to keep up with its competitors in the communications market, such as Apple and Google. The late launch of its iPad-like tablet, the PlayBook, is considered a specific failure.
Nonetheless, the company did meet its own sales expectation of 500,000 sales of the device in its inaugural quarter.
The company is also shaking up its management, as chief operating officer Don Morrison is planning to retire. Thorsten Heins will become the COO of products and sales, while Jim Rowan will become COO of the operations side.
RIM has been under pressure of late to do away with the co-CEO title, currently shared by founders Mike Lazaridis and Jim Balsillie.
Northern Securities technology analyst Sameet Kanade said he expects a total of about 3,000 job cuts, noting that RIM has made a number of acquisitions in recent years that has increased its total number of employees.
Kanade said the job cuts will be disruptive for the company.
"It doesn't help employee morale, it doesn't help the expectant financial performance," Kanade said.
The cuts also won't make any difference to RIM's current market share, he added.
With files from The Canadian Press