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RIM Shedding Jobs

{complink 4644|Research In Motion Ltd. (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, {complink 987|Celestica Inc.}, 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.

19 comments on “RIM Shedding Jobs

  1. Wale Bakare
    June 20, 2012

    “an attempt to regain market share from Apple Inc.'s iPhone and devices running Google Inc.'s Android”.

    Competing well with Apple and Androids requires an absolute new thing. Where are the job loses going to affect? Canada, Germany or UK? Should RIM open office/plant in Africa, would there be better growth in its sales especially regaining its market share potion that's fast decreasing in North America and Europe. What are your thoughts? Read another different report here, RIM plans to open office in Lagos – Nigeria


  2. elctrnx_lyf
    June 20, 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.

  3. Barbara Jorgensen
    June 20, 2012

    Wale: I think most of the job cuts are in North America. As for competing with Apple and Android, it doesn't look good, does it?

  4. Taimoor Zubar
    June 20, 2012

    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?

  5. Taimoor Zubar
    June 20, 2012

    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.

  6. Eldredge
    June 20, 2012

    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.

  7. ITempire
    June 20, 2012

    @ eldredge

    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.

  8. ITempire
    June 20, 2012

    @ electrnx_lyf

    “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.

  9. Daniel
    June 21, 2012

    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.

  10. Daniel
    June 21, 2012

    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?

  11. mfbertozzi
    June 21, 2012

    @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?

  12. ITempire
    June 21, 2012

    @ mfbertozzi

    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.

  13. mfbertozzi
    June 22, 2012

    @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.

  14. ITempire
    June 22, 2012

    @mfbertozzi

    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.

  15. mfbertozzi
    June 25, 2012

    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.

  16. Mr. Roques
    June 26, 2012

    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.

  17. ITempire
    June 26, 2012

    @ Roques

    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.

  18. Mr. Roques
    August 25, 2012

    Well, do you believe they will make it? a division of it?

  19. ITempire
    August 27, 2012

    @ Roques

    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.

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