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BlackBerry maker RIM to cut about 2,000 jobs, shuffle executives

July 25, 2011 | 10:55 am

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Research in Motion, the maker of the BlackBerry smartphones and tablet, said Monday that it will cut its workforce by about 2,000 jobs and move some executives into new roles in an effort to battle the continued growth of Google's Android and Apple's iPhone.

The job cuts, which are beginning on Monday, will leave the Canadian firm with about 17,000 employees, RIM said. The moves follow a 12% drop in quarterly revenue during RIM's fiscal first quarter, which was reported in June.

RIM said the decisions fall in line with its "cost optimization program," which is "focused on eliminating redundancies and reallocating resources to focus on areas that offer the highest growth opportunities."

In particular, the smartphone maker said, the layoffs are "believed to be a prudent and necessary step for the long-term success of the company and ... [follow]  an extended period of rapid growth within the company whereby the workforce had nearly quadrupled in the last five years alone." It seems that RIM now believes it grew bigger than it needs to be.

Among the handful of executive shuffles at RIM announced Monday, Don Morrison, one of the company's three chief operating officers, is retiring; his job will be divided between the other two remaining COOs. Thorsten Heins will become COO of product and sales and Jim Rowan will be chief operating officer of operations.

"All product engineering functions, including both hardware and software teams, are being consolidated under Thorsten's direction," RIM said. "This consolidation of product engineering functions is expected to both produce greater efficiencies and help to accelerate new product introductions in the future."

Rowan's expanded role will make him "responsible for manufacturing, global supply chain and repair services," RIM said, and he will also oversee the organizational development and facilities management functions.

Brian Bidulka, RIM's chief financial officer, and Rowan will oversee the cost-cutting program.

The job cuts and executive changes might leave analysts, investors and consumers not feeling too confident about what direction RIM is going in. The firm once ruled the smartphone market with email-friendly phones loved by IT departments at businesses worldwide because of security features such as in-phone encryption and remote shutoff.

"On the one hand, it is positive to see that the company is not standing still and taking steps to lower costs and streamline its operations. But on the other hand, one has to wonder if this is going to make its execution crisper," Shaw Wu, a tech analyst with the Sterne Agee investment firm, said in a statement. "One has to wonder if they can do better with less headcount. In addition, one never wants to see a company cut investment in a fast-growing market especially when its competitors [Apple, Google and Microsoft] continue to invest aggressively."

RIM also hasn't found much success with its PlayBook tablet computer -- a speedy and easy-to-use gadget that lacks many features consumers expect, such as a native email app.

RELATED:

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BlackBerry maker Research in Motion has disappointing earnings report, stock plummets

-- Nathan Olivarez-Giles

twitter.com/nateog

Photo: A BlackBerry Playbook tablet. Credit: Scott Olson / Getty Images

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