Bloomberg News

RIM’s Job Cuts Under Way as Company Seeks $1B in Savings

June 20, 2012

RIM CEO Thorsten Heins

Thorsten Heins, president and chief executive officer of Research In Motion Ltd. (RIM), speaks at the BlackBerry World Conference in Orlando, Florida, U.S. Photographer: Julie Fletcher/Bloomberg

Research In Motion Ltd. (RIMM:US), the struggling maker of the BlackBerry smartphone, is cutting jobs as part of a broad cost-saving effort aimed at trimming $1 billion in operating expenses.

“RIM has committed to achieving significant efficiencies and operating cost reductions over the course of this fiscal year,” Tenille Kennedy, a spokeswoman for the Waterloo, Ontario-based company, said yesterday in an e-mail. “Headcount reductions are part of this initiative.”

RIM has said it aims to save the $1 billion in operating costs annually by cutting the number of manufacturing sites. RIM also is “reviewing its organizational efficiency” across the company. Electronics supplier Celestica Inc. announced this week that it will cease manufacturing the BlackBerry as part of RIM’s effort to streamline its supply chain.

The shakeup may lead to job cuts of 2,000 to 3,000, assuming RIM tries to eliminate 30 percent of the targeted operating expenses through labor reductions, according to Sameet Kanade, an analyst at Northern Securities Inc. in Toronto. The move follows a round of 2,000 cuts announced about a year ago.

Stock Drop

Chief Executive Officer Thorsten Heins is working to renew faith in the company after a stock decline of 60 percent in the past 12 months. 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 (RIMM:US) fell 3.9 percent to $10.33 at the close in New York. The stock has declined 29 percent in 2012.

Nokia Oyj, another mobile-phone manufacturer trying to turn around its operations, is cutting jobs as well. The Finnish company plans to eliminate as many as 10,000 positions and will shut down production and research sites.

The Wall Street Journal reported earlier on RIM’s job cuts, saying the company has been laying off small batches of employees for several weeks. RIM is doing the cuts in groups of at least 10, the Journal said, citing unnamed people familiar with the matter.

To contact the reporter on this story: Nick Turner in New York at nturner7@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net


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