2 min read

RIM plans deep staff cuts soon

Published reports indicate that new CEO Heins is planning to reduce workforce by 11 per cent

According to two published reports, Research in Motion (TSX: RIM) of Waterloo, Ont. may significantly dent its workforce. It’s expected that company CEO Thorsten Heins will reduce staff by more than 10 per cent or about 6,000 jobs over the next few months.

Internally this staff reduction is being called a “re-framing” and will touch several areas of the business such as sales, marketing, operations, legal and human resources.

Another problem facing Heins is the company’s ever increasing inventory of smartphones and PlayBook tablet devices. Slow sales and led to a dramatic increase in inventory the company just can’t get rid of. Report says this might lead to another hard hitting write-down, the company’s third this year. The estimated value of RIM’s inventory is just over $1 billion and is based on the market cost of smartphones such as the Bold and Torch that are held in warehouses controlled or operated by RIM, not just in Canada but around the world.

It does not include what is left on mobile device retailer’s shelves or with service or solution providers in the channel.

Two of RIM’s long-time leaders have made plans to leave the company. RIM chief legal officer Karima Bawa is planning to retire after a 12-year career at the company. She will be helping with the transition as she exits the firm. Also Patrick Spence, RIM top Middle-Eastern and Asian executive announced he was leaving the company after a decade of service.

RIM said its policy is not to comment on rumors and speculation, but pointed to comments by Heins in an earnings call in March about a focus on driving excellence in operating metrics and efficiency, including an efficiency push across all functions of the organization.

The company has been seeing its market share decline in the smartphone market as competition picks up from Apple’s iPhone, and phones running the Android operating system. Research firm IDC reported last week that 9.7 million phones running the BlackBerry operating system shipped in the first quarter for a market share of 6.4 percent, which was far lower than shipments of 13.8 million units for a market share of 13.6 percent in the first quarter of last year.