Struggling smartphone vendor RIM will cut around 2,000 jobs – roughly 10.5% of its workforce – as it seeks to reign in costs following a 10% fall in fiscal 1Q profit.
The firm revealed the job cuts as it fleshed out a cost reduction strategy announced mid-June. It plans to begin notifying staff in North America and some other countries of the layoffs this week, with all employees being offered severance and relocation payments.
RIM states the layoffs are “a prudent and necessary step for the long term success of the company,” and will help redress a rapid period of growth in staff numbers that has seen the workforce grow by almost four times over the past five years.
The device firm cut around 200 jobs in June, after it reported a 10% slump in fiscal 1Q12 profit – covering the three months to end May – and lowered its outlook for fiscal 2Q12 device shipments.
Financial analysts told Reuters the latest job cuts will do little to improve RIM's competitive position, warning that changes will need to be made at the top level.
While the vendor has announced some changes, including expanding two roles into COO positions, the overhaul may not go far enough for one disgruntled executive, who last month revealed staff morale has hit rock bottom in an open letter to RIM chiefs.