Beleaguered Canadian smartphone maker Research In Motion Ltd. (RIMM: Quote,RIM.TO: Quote) is laying off employees as part of its ongoing strategic review of its business and financial performance that targets $1 billion in cost savings by the end of 2013.
The Waterloo, Ontario-based company was said to be targeting the elimination of up to 2000 jobs by the end of next year as it prepares for a huge restructuring amid plunging sales.
RIM confirmed an unspecified number of jobs cuts in an e-mail published by the Toronto Star.
Sources have told the Wall Street Journal that RIM started the layoff of employees in batches of 10 over the past few weeks. The company currently has 16,500 staff globally.
The planned restructuring under its new President and CEO Thorsten Heins would make RIM slimmer as it tries to come out with a successful new set of BlackBerry devices, called BlackBerry 10, to boost its sales.
Heins had revealed plans during the fourth-quarter earnings call on March 29 to streamline operations as well as save $1 billion in costs. The company also said then that it expects continued pressure on its revenue and earnings throughout fiscal 2013.
Research In Motion, once the undisputed king of the smartphone market, has struggled lately to compete with Apple, Inc.'s (AAPL) iPhone and iPad, as well as devices powered by Google, Inc.'s (GOOG) Android software. According to research firm IDC, BlackBerry reportedly accounts for only 7 percent of global smartphone shipments at present.
The company on May 29 also warned of a first quarter operating loss and revealed that it has hired J.P. Morgan Securities LLC and RBC Capital Markets to assist the company in the strategic review of its business and financial performance. The company releases its first-quarter financial results on June 28.
Heins also then warned in May that there will be significant spending cuts and headcount reductions in some areas throughout the remainder of the fiscal year. Media reports on the same day said RIM is likely to cut over 2000 jobs.
The company had announced plans at the same time last year also to cut about 11 percent of the workforce or around 2,000 jobs. That was the biggest employee reduction in the company's history.
In Wednesday's regular trading session, RIMM is currently trading at $10.33, down $0.41 or 3.86% on a volume of 6.08 million shares. In the past 52-week period, the stock has been trading in a range of $9.57 to $33.54.
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by RTT Staff Writer
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