BlackBerry (Nasdaq: RIMM; Toronto: RIM) is the latest electronics company to announce job cuts.
Businesses across the industry are striving to increase profitability, but the stakes are even higher for RIM. The BlackBerry maker is seeking to stem losses and regain the edge it once had in the mobile communications market. After a series of mishaps and episodes of mismanagement, the company's stock has fallen by as much as 61 percent in the past year, according to Bloomberg. The news agency says RIM will eliminate 2,000 to 3,000 jobs.
A day earlier, another Canadian company, Celestica Inc. (NYSE, Toronto: CLS), said that it would no longer manufacture the BlackBerry, and that RIM is streamlining its supply chain. Celestica expects the impact on its business not to exceed $35 million. The Globe and Mail in Toronto says RIM accounts for as much as one-fifth of Celestica's revenue. For its first fiscal quarter of 2012, Celestica reported revenue of $1.69 billion.
Bloomberg reports:
RIM plans to release a new lineup of phones based on the BlackBerry 10 operating system this year, an attempt to regain market share from Apple Inc.’s iPhone and devices running Google Inc.’s Android.
RIM shares rose 1.4 percent to $10.75 yesterday in New York. The stock has fallen 26 percent in 2012.
I'm not really confident if RIM will be ever able to make a good come back with their new series of mobiles. The recent trends in mobile sales still favour the android followers. The sales of blackberry are really down and i don't see around any one purchasing black berry phones. Even their trademark email systems are becoming more common and their trademark email systems is vastly being replaced by users with android or iOS devices.
" Even their trademark email systems are becoming more common and their trademark email systems is vastly being replaced by users with android or iOS devices."
@elctrnx_lyf: I agree. I think RIM is losing out on all the competitive advantage it once had. Security was their major feature but now Andrioid and iOS seem to be offering the same level of security so there's no differentiation. Apart from it, their email service, as you mentioned, is no longer exclusive and other platforms seem to be offering service of the same quality.
"Even their trademark email systems are becoming more common and their trademark email systems is vastly being replaced by users with android or iOS devices. "
You have a point here. This email system has been the strength of BB phones and if this strength is effectively adopted by Apples and Androids, then it wont take long for companies to reconsider their BB loyalty approach. This should be the biggest threat for BB.
@WaqasAltaf: well, I agree with you, but honestly, apart the innovative email service launched a few years ago, which are other innovations from RIM? Jobs' cut could be a temporary (bad) choice for rightsizing the organization, but there is the mindset for making good steps forward in a such competitive market?
I agre with you. Cutting jobs may be good for surviving temporarily but aint a great idea in the longer run. There has to be an effective plan to keep the foot in the market. And the strategy has to be agressive as well. Sounds like a great challenge ahead.
@WaqasAltaf: I see, it has been discussed in depth during yesterday live chat; the additional point is about suppliers; jobs' cut could be a temporary step for making savings, but it is tremendous in terms of impact for the whole ecosystem around.
I think job cuts can be great if the employees were assigned duplicated tasks and the job description was too easy. This can not only be a survival factor in the shorter run but also a contributor to efficient environment in long term.
However, laying off staff that were necessary with a hope that the task can be managed without them can prove to be costly. The point is cost saving should not be the only major factor to be considered while laying off. Long term sustainability is important too.
WaqasAltaf, great and very pragmatic perspective, I totally agree with and I guess someone from companies which are meeting difficulties with, could consider it for evolving the situation. Thx.
Well, when a company is in need of a reinvention, maybe scaling down is a good thing. Rediscover its target market and then go after them. But I don't think that's the way RIM is going.
They should forget about Apple, don't even mention it. They don't have a chance in the short run to catch them. Continuing what their doing is only harming them because, for their employees and for the general public, it just looks like RIM losing batttle after battle.
Thats true. RIM has an extremely challenging situation to face. Demotivated employees, competitors strengthening day by day and many financial problems such as investors' concerns due to lack of growth and dividends will make them further unlikely to swim up to the sea unless a miraclous product success is witnessed.
I cant say they will make it or not but with so much competition from Android, Apple and now even Windows, they will have to fight it hard. Fight it hard to make sure that there existing customers dont leave. Getting the new ones is even bigger a challenge.
"I think most of the job cuts are in North America"
@Barbara: What do you think are some of the reasons behind it? Is it the fact that North American areas might be the least profitable for RIMs and that's why they're looking to cut down on the jobs there?
Not good news from RIM, but this action is not a big surprise either. With stiff competition from Apple and android phones, and no real innovation from RIM, cutbacks are unavoidable.
Well its about targetting a segment. Apple and Android phones are targetting the consumer market and hence all their phones' features and apps are consumer-centric with entertainment the basic goal.
Meanwhile, RIM is targetting corporate users' segment where security features and connectivity are of essence. Need for extensive innovation might not be there as much as in consumer phones' market. Nonetheless, competition can be inevitable in corporate market too from Apple and android phones.
Eldredge, I think things are not happened because of tight completions, it's a clear example of mismanagement. Still there are possibilities to retain their market share because most of the enterprise level peoples and employees still prefer Blackberry services, especially in view of BYOD policy. If they are stopping the production, then what's the future of blackberry services?
Barbara, it seems that they are following Nokia. Like Nokia if RIM is also planning to shut down its R&D and production facility, that would be a great loss to the mobile sector. In between we had read about some plan for M&A with RIM, any updates about it.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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