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RIM Confirms Another Round of Layoffs

RIM Confirms Another Round of Layoffs
June 20, 2012 1:37PM

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RIM CEO Thorsten Heins said RIM was going through a significant transformation as it moved toward the BlackBerry 10 launch, and RIM's financial performance would continue to be challenging for the next few quarters. He said the ongoing competitive environment is affecting RIM's business in the form of lower volumes and competitive pricing.

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Research In Motion on Wednesday confirmed plans to slash more of its employee base. The BlackBerry maker did not indicate how many employees it would lay off, but said the company has "reduced some positions as part of its program and may continue to do so as the company methodically works through a review of the business."

RIM cut about 2,000 jobs 11 months ago. More recently, the Canadian company abandoned its co-CEO strategy and hired a new president and CEO, Thorsten Heins. But Heins hasn't stopped the bleeding -- at least not yet. In late May, RIM announced that it may lose money in the current financial quarter. RIM's first-quarter financial results will go public June 28.

Heins said RIM is going through a significant transformation as it moves toward the BlackBerry 10 launch, and its financial performance will continue to be challenging for the next few quarters. He said the ongoing competitive environment is affecting RIM's business in the form of lower volumes and competitive pricing in the marketplace.

RIM Scramble

"We are continuing to be aggressive as we compete for our customers' business -- both enterprise and consumer -- around the world, and our teams are working hard to provide cost-competitive, feature-rich solutions to our global customer base," Heins said. "On the positive side, we expect to further increase our cash position in Q1 from the approximately $2.1 billion we had at the end of fiscal 2012."

RIM has hired J.P. Morgan Securities and RBC Capital Markets to help the company review its business and financial performance. The advisers are working to help RIM with the strategic review it referenced on its year-end financial results conference call and to evaluate the relative merits and feasibility of various financial strategies, including opportunities to leverage the BlackBerry platform through partnerships, licensing opportunities and strategic business model alternatives. But that review, if completed, hasn't been made public yet.

Defending Its Turf

We talked to Rob Enderle about the latest RIM news. He told us RIM has to cut to the point that it is revenue positive and focus on the future.

"Right now they are living week to week, and when a company does that it has a limited number of weeks," Enderle said. "So RIM has to get off life support and into recovery mode, otherwise it's just a spiral. They have to break the spiral or the end is inevitable."

The spiral started when RIM failed to protect its turf, Enderle said. He recalls RIM's heyday, when it had a loyal following and a differentiated product. RIM killed some of the differentiation. Then RIM made concessions on security that made its products appear less secure, Enderle said, and didn't defend the keyboards against Apple's touchscreen.

"RIM pretty much burned all their advantages and ended up running against Apple and Apple's market. There's no way to win that," Enderle said. "You have to fight from your strengths, not the other guy's strengths. They forgot who they were and they fundamentally forgot what their advantages were and they didn't protect them.

"The right person could turn that company around, but it would mean going back to the basics."

Tell Us What You Think
Comment:

Name:

SG:

Posted: 2012-06-21 @ 10:04pm PT
RIM has been dealing with a huge management and innovation problem for a long time. there are a bunch of old Motorola guys with senior management positions in the company from a few years ago and the only thing they are caring about is their own pockets. That's why the company is going down.

john:

Posted: 2012-06-20 @ 3:04pm PT
Garbage paid apple article? It seems very obvious.



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