Beleaguered Canadian smartphone maker Research In Motion Ltd. (RIMM: Quote,RIM.TO: Quote) is planning to split its business into two by separating its handset division from its messaging network, and spinning off the handset division to Amazon, Inc. (AMZN) or Facebook, Inc. (FB), according to media reports on Sunday.
It could also reportedly sell the messaging network to Apple, Inc. (AAPL) or Google, Inc. (GOOG) and transform itself into an enterprise solutions provider.
Another alternative doing the rounds in the media is to keep the company together and sell only a stake to a larger technology company such as Microsoft Corp. (MSFT).
The Blackberry maker's planned moves are a part of its ongoing strategic review of its business and financial performance.
An e-mail published by the Toronto Star last week said the Waterloo, Ontario-based company is looking to eliminate an unspecified number of jobs, reportedly up to 2000 jobs, by the end of next year as it targets $1 billion in cost savings by the end of 2013.
Sources have told the Wall Street Journal last week 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 was seen as the company's effort to go slimmer as it tries to come out with a successful new set of BlackBerry devices, called BlackBerry 10, to boost its sales.
Research In Motion, once the undisputed king of the smartphone market, has struggled lately to compete with Apple's iPhone and iPad, as well as devices powered by Google's Android software. According to research firm IDC, BlackBerry reportedly accounts for only 7 percent of global smartphone shipments at present.
Heins had first revealed plans during the fourth-quarter earnings call on March 29 to streamline operations in order to save $1 billion in costs by the end of 2013. The company also said then that it expects continued pressure on its revenue and earnings throughout fiscal 2013.
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 had earlier in May warned 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.
RIMM closed Friday's regular trading session at $9.86, down $0.21 or 2.09% on a volume of 16.76 million shares.
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by RTT Staff Writer
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