Research in Motion (RIM), the company behing Blackberry has announced that the company would be cutting down 5,000 jobs. The announcement was made after the company has revealed a sales decline from their last quarter report.
The layoffs which equates to 30% of RIM's workers will be implemented in a nine-month span. RIM currently has 16,500 employees. Thorsten Heins, the President and CEO of RIM remarked that this business decision was needed in order to "change the scale and refocus the company on areas of highest opportunity". He also added his thoughts behind this decision remarking the following statements:
"It is necessary to change the scale and refocus the company. I fully understand the impact a workforce reduction of this size has on our employees and the communities in which we operate. I assure you that we wouldn't move forward with a change of this size if we didn't think it was critical for our future."
Aside from the job loss, RIM would also reduce cost in other departments in the company incuding research, development, marketing and sales costs.
This announcement came after RIM revealed a huge sales decline from last quarter. RIM revealed that the company list US$518 million which is equivalent to 99 cents per share. This was a big loss if compared to last year's figures from the same quarter (US$695 million or US$1.33 per share). CEO Thorsten Heins acknowledges that the company will face further pressure regarding its financial standing over the next months. There are rumors that Blackberry is considering partnering up with Microsoft in order to utilize Microsoft's latest OS which is Windows 8 for their own line of Blackberry smartphones. Blackberry has not denied nor confirmed this supposed partnership.
In addition to this troublesome news, RIM also announced that they are delaying the release of Blackberry 10 by next year. Blackberry 10 was supposed to be revealed by the end of the year in order to compete with Apple and Google. The tough competition in the smartphone market has caused a lot of problems with RIM as Blackberry users opted to switch to Apple's iOS or Android. This delay for Blackberry 10 can possibly cause greater loss for the company as Apple is expected to push out iPhone 5 which can overshadow the return of Blackberry in the market.
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