Blackberry Maker RIM To Lay Off 10% - InformationWeek
09:21 AM

Blackberry Maker RIM To Lay Off 10%

Research In Motion also shakes up executive ranks as it looks to keep Apple and Google within its sites.

Struggling smartphone manufacturer Research In Motion said Monday that it would lay off 2,000 employees, or about 10% of its total workforce, and shake up its senior management ranks in an effort to rein in costs and improve its competitive position against rivals Apple and Google.

"The workforce reduction is believed to be a prudent and necessary step for the long-term success of the company and it follows an extended period of rapid growth within the company whereby the workforce nearly quadrupled in the last five years alone," RIM said in a statement.

RIM first warned on June 16 that significant layoffs were likely. The job cuts will be spread across the company's worldwide operations, and will bring its total staff complement down to about 17,000 workers from 19,000.

Also, RIM announced that COO Don Morrison, who had been on medical leave, will retire from the company after 10 years with the organization. "We understand and respect his decision to retire after successfully dealing with a serious medical challenge and we wish him a quick recovery," said RIM co-CEOs Jim Balsille and Mike Lazardis, in a joint statement. Morrison had been suffering from an undisclosed illness.

RIM will split COO responsibilities between two individuals. Thorsten Heins takes on the role of COO for products and sales and will oversee hardware and software engineering. Jim Rowan becomes COO for operations, with oversight over manufacturing, global supply chain, and repair services.

In other personnel moves, sales executive Patrick Spence becomes managing director for global sales and regional marketing. Spence will report to Heins. CIO Robin Bienfait maintains her current responsibilities and, under an expanded remit, will also lead the company's enterprise business unit. David Yach remains CTO.

RIM's BlackBerry smartphone platform was once so ubiquitous it was dubbed the "Crackberry" by addicted users. But in the past year it's been eclipsed by devices such as Apple's iPhone and Google Android-based phones from a range of manufacturers.

Critics have charged that the company failed to respond to the new competitive threats and lost its technological edge. Some said Balsille became too preoccupied with a failed attempt to purchase the National Hockey League's Phoenix Coyotes and move the franchise near RIM's home turf in Ontario, Canada.

RIM's share of the U.S. smartphone OS market fell 4.2%, to 24.7%, for the three-month period ending in May, according to market watcher ComScore. Google led the field with a share of 38.1%, while Apple was second with 26.6%. RIM shares were off 2.08% in pre-market trading Monday.

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