RIM Cuts 11% Of Workforce

July 31, 2011 by admin
Filed under Smartphones

BlackBerry maker Research In Motion Ltd plans to slash approximately 11 percent of its workforce to curb costs as it struggles to compete against Apple Inc and Google Inc.

The announcement of 2,000 job cuts on Monday came a month after the Canadian company acknowledged that it would reduce headcount for the first time in a decade.

One analyst said the job cuts were slightly deeper than expected but were key to RIM’s recovery from a slump triggered by product delays and intense competition from Apple’s iPad and iPhone as well as devices powered by Google’s Android software.

RIM’s U.S.-listed stock, already near multi-year lows, was down as much as 2 percent before the market opened. It was trading down 1.8 percent at $27.40 on the Nasdaq
just before the open.

“This is not totally unexpected. I think the size of (the cuts) is a little bit bigger than what they were intimating before,” said Jefferies & Co analyst Peter Misek. “I think this is obviously realigning the cost structure to a new growth, or sales, reality.”

RIM said one-time charges from the job cuts were not included in its outlook for the second quarter or for the full year, and it would explain the financial impact of the cuts when it reports second quarter results on September 15.