Report: RIM may lay off up to 2,000 employees amid restructuring
Research In Motion (NASDAQ:RIMM) may cut at least 2,000 employees in the next couple of weeks as it embarks on a restructuring program meant to focus the company's operations as it moves toward the launch of BlackBerry 10, according to a report in the Globe and Mail.
The report, which cited unnamed sources, said that RIM, which has around 16,500 employees, may cut even deeper than 2,000. According to a Reuters report, which also cited unnamed sources, RIM aims to get its headcount down to 10,000 people by early next year.
A RIM spokeswoman declined to comment.
During the company's fiscal fourth-quarter earnings conference call in late March, RIM CFO Brian Bidulka hinted at a possible restructuring. He said the company will begin a program designed "to drive $1 billion in savings by the end of fiscal 2013 based on our current run rates." He said initially, the company expects savings to be "driven primarily by optimizing the cost position of our products and services and improve the overall resource effectiveness and organizational efficiency. Initiatives under the program will range from engineering, material sourcing, supply chain and quality to sales and marketing and business support. These initiatives have senior executive ownership and accountability."
Some have said that amid falling sales and declining margins, RIM needs to slim down its structure as it focuses on BlackBerry 10, the platform the company is betting its future on. "We support further cost realignment in the face of falling revenue and margins," Macquarie analyst Kevin Smithen said in a note to clients, according to Reuters.
In the here and now, RIM still faces many challenges, including a buildup of inventory. According to data compiled by Bloomberg, RIM may be facing a third writedown since December, as the value of its in-house supplies of smartphones and tablets grew 18 percent in the last quarter alone.
In other RIM news, another RIM executive joined the exodus of top-level officials leaving the company. RIM's chief legal officer, Karima Bawa, is leaving after 12 years. His departure comes after that of Patrick Spence, who resigned as RIM's head of global sales after 14 years with the firm.
- see this Globe and Mail article
- see this Bloomberg article
- see this Reuters article
- see this WSJ article (sub. req.)
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