5,000 jobs to go as crisis deepens at RIM

By John Leonard
29 Jun 2012 View Comments
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In a significant deepening of Research In Motion's (RIM's) problems following a Q4 deficit of £78.1m ($125m), CEO Thorsten Heins yesterday admitted a Q1 £334m ($518m) net loss over the three months to 2 June.

This comes at the end of a remarkable week for announcements of new tablets, phones and mobile operating systems, albeit with a notable absentee from the party – RIM.

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Once the darling of enterprise mobility thanks to its revolutionary BlackBerry devices, the Canadian vendor has spent the last couple of years playing catch-up with the competition, particularly iPhones, iPads and Android-based smartphones and tablets.

Heins' declaration was accompanied by an announcement that the firm's global headcount of 16,500 staff would be cut by 5,000 – or around 30 per cent. It is not yet clear exactly where these cuts will be made, but non-core activities are likely to be outsourced to other companies that have a better economies of scale, according to online magazine BerryReview.

In March, Heins said that the company would be refocusing its efforts on the enterprise market. However, in a further blow to RIM's reputation, it now seems that the launch of the new operating system, BlackBerry 10, a critical part of these plans, will be further delayed until 2013.

"I will not deliver a product to the market that is not ready for our customers or doesn't have the outstanding user experience that I expect BlackBerry to have. I will not compromise on this issue," said Heins during a media conference call on Thursday.

BlackBerry 10 will make it easier for developers to port Android apps to the platform, helping to alleviate a shortage of decent apps for the BlackBerry platform.

Perhaps desperate to be the bringer of at least some good news, Heins said that RIM's forthcoming LTE PlayBooks are currently in the final stages of testing, with a release date "in the near future." But given the highly competitive state of the current mobile device marketplace, with Microsoft and Google now joining the fray, as well as the lukewarm reception given to previous PlayBooks, this could be too little too late.

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