RIM cuts around 2,000 jobs; Shuffles management

Research In Motion
By Adam Zeis on 25 Jul 2011 09:53 am EDT
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RIM announced today that in addition to some management changes, they are cutting about 2,000 employees from their workforce. We knew that some slimming down was on the way for RIM, but weren't sure of the exact number of employees that would be lost. More on the cuts and other "expense reductions" will be known after the RIM's next earnings call in mid-September.

"The workforce reduction is believed to be a prudent and necessary step for the long term success of the company and it follows an extended period of rapid growth within the company whereby the workforce had nearly quadrupled in the last five years alone."

Both Jim Balsille and Mike Lazaridis will retain their co-CEO positions for now however. Along with the cuts comes some movement among management positions at RIM as well. Just a few days ago RIM lost Ryan Bidan to Samsung, and RIM today has announced the retirement of their Chief Operating Officer Don Morrison as well. Keep reading for the full press release.

Research In Motion Provides Management Update and Details On Cost Optimization Program

WATERLOO, ONTARIO--(Marketwire - July 25, 2011) - Research In Motion Limited (RIM) (NASDAQ:RIMM)(TSX:RIM) today provided an update on changes in responsibilities amongst the company's senior management team, as well as additional details about the cost optimization program announced on June 16th. The changes described below are intended to create greater alignment of the organization and to streamline RIM's operations in order to better position the company for future growth and profitability.

Senior Management Update

Thorsten Heins is taking on the expanded role of COO, Product and Sales. All product engineering functions, including both hardware and software teams, are being consolidated under Thorsten's direction. This consolidation of product engineering functions is expected to both produce greater efficiencies and help to accelerate new product introductions in the future.

After more than ten years of success overseeing sales and country operations for RIM in various regions including North America, Asia Pacific and EMEA most recently, Patrick Spence is taking on the role of Managing Director, Global Sales and Regional Marketing. Patrick will report to Thorsten Heins and will work with Thorsten to tightly couple the execution of product development and regional business operations around the world, enable faster local execution tailored to local market needs and support the needs of RIM's valued operator and distribution partners.

Robin Bienfait is maintaining her responsibilities as CIO, including BlackBerry Operations, Customer Service and Corporate IT functions, and also taking on responsibility for the Enterprise Business Unit focused on delivering outstanding customer service and extending RIM's leadership in the enterprise sector.

David Yach, in his role as CTO, Software, will focus on current and future software platforms, as well as the surrounding developer and application ecosystem.

Jim Rowan is taking on the expanded role of COO, Operations and will continue to be responsible for manufacturing, global supply chain and repair services. As part of the streamlining effort and drive towards greater operational efficiencies, he will also now oversee the Organizational Development and Facilities Management functions.

Brian Bidulka, RIM's CFO, is working together with Jim Rowan in overseeing the Cost Optimization Program which is currently underway.

Cost Optimization Program

In addition to the management changes outlined above, RIM today provided further details on its cost optimization program, which is focused on eliminating redundancies and reallocating resources to focus on areas that offer the highest growth opportunities and alignment with RIM's strategic objectives. The workforce reduction is believed to be a prudent and necessary step for the long term success of the company and it follows an extended period of rapid growth within the company whereby the workforce had nearly quadrupled in the last five years alone.

As part of this broad effort, RIM is reducing its global workforce across all functions by approximately 2,000 employees. RIM intends to notify impacted employees in North America and certain other countries this week. The remainder of the global workforce reductions will occur at a later date subject to local laws and regulations. All impacted employees will receive severance packages and outplacement support.

The size of this workforce reduction is in line with the preliminary estimate that was factored into RIM's full year financial guidance on June 16, 2011. Following the completion of the workforce reduction, RIM's global workforce is expected to be approximately 17,000 people. Additional information about the financial impact of this workforce reduction and other operating expense reductions will be communicated when the company reports Q2 results on September 15, 2011. As explained on June 16, 2011, any one-time charges associated with the cost optimization program are not included in RIM's Q2 and full year outlook, but will be identified and disclosed on September 15, 2011.

48 comments

pzykotic

The co-CEOs should be the first ones thrown out on their asses for being complete failures, especially Mike L, he's the worst of the two.

jenks5150

If you knew anything about RIM, you would know that without Mike L there would be no BlackBerry, or no BlackBerry worth buying. Old and obsolete or not, he is the brains behind new products. They all need to cut the BS and deliver what everyone is asking for, though.

mobilethoughtz

Agreed on Mike, he is BlackBerry and needs to delivery. However two people that always escapes any criticism are Thorsten Heins (COO - engineering) and David Yach (CTO). Either they step up their game or they should be replaced. Their backgrounds do not stand out as innovators in this space and have not demonstrated they have the ability to push against Mike and move the technology forward. One is from Siemens (yawn) and the other a buddy of Mike's from university (yawn).

westex#WP

You say that they all need to deliver what everybody is asking for?

Are you aware that is precisely Mike's biggest shortcoming. Did you read the insider account of what goes on inside RIM posted recently on this site? Mike didn't want camera's or an MP3 player included. Ray Charles has a clearer vision of what the consumer wants. Or the Carriers want.

I agree that Mike and Jim both have played the biggest roles in RIM's history, and that Mike is crazy smart, but their strategy and decisions have led this company to the brink of irrelevancy.

Darlaten

The key work in your reply is "history" - Mike and Jim were significant in RIM's historical development and rise to power. But their usefulness is at an end when they failed to recognize the change in the market place for consumers who were demanding up-to-date technology and phones that were feature-rich not feature-poor. In short, I think that they were the right people for the past and their work at devleoping the company should be conmendable. But they are the wrong people for the present and the future.

pzykotic

Brains behind what new product? Oh you mean the Android Pro they're launching and calling the Bold 9900. Oh right, I forgot about that phone. Who can forget the legendary Torch 2 which is the same as the original Torch just better hardware. Yeah I dunno man with a CEO like that I'm glad I dumped RIM stock when it was downgraded the first time this year.

SharpieFiend

I agree, the man who invented the BlackBerry is a complete failure. He should have stayed in school and got his engineering diploma - maybe he'd be working at Apple now or something...

mssca

Agree... We all know that it is hard to fight against Apple Inc. But if I am a shareholder of RIM, I want the company fire all the top officials.

gord888

Like every company that grows quickly, there is a lot of fat that needs to be trimmed. Many people take their jobs for granted and under-perform... so it's a good time to "clean house". It sucks that they are losing so many jobs... but I'm assuming they'll be hiring again when they start growing again.

westex#WP

looking at the management shuffle as a good thing. Probably necessary, too, as they have had several managers leave as of late. I can't help but think that RIM not having the right people in the right place has, at least, contributed to their problems as of late.

Here's to moving forward.

bankersbanter

Well it had to happen at some point, sorry for those who were deemed expendable.

SharpieFiend

I wonder how many of the 2,000 will be management? As I understand it there is a lot of fat there to cut...

mobilethoughtz

That is 100% true - there are a lot of solid individual contributors reporting to a lot of overhead. The company is strong from the basis of the people who work there on a daily basis, they just have problems getting consistent and timely direction.

STR8WESTCOAST

LOOOOOOOOOOOOOOOOOOOOOOO OOOOOOOOOOOOOOOOOOOOOOOOOOO LOOOOOOOOOOOOOOOOOOOOOOOLLLLLLLLLL!!!!!!!!!

gbester

You find 2000 people out of work funny? You are one sick puppy.

birdman_36

It's amazing a company which makes a healthy profit, carries no debt and a has a billion dollars in the bank feels the need to make such widesweeping personnel cuts. It's likely to satisfy the shareholders and drive the stock price up.

SharpieFiend

Actually, this is a huge positive. With their explosive headcount growth over the past few years, this gives them an opportunity to correct hiring and promotion mistakes they have made during that time. They otherwise would not get this opportunity.

herrbremerhaven

Actually, the funny part is that it is having the opposite effect. First the coCEOs termed it "streamlining" rather than restructuring, which is bad because restructuring would be an admission that they need to improve, while "streamlining" indicates they were asleep at the wheel and hired too many people. Secondly, they admitted they delayed products due to changes to hardware, namely getting faster processors into the next line of phones. That meant they missed one of the two most important selling times for phones, namely the back-to-school time period. When they next report earnings in mid-September, it is expected that the numbers will be even lower than the previous quarter, though what everyone will be watching is forward looking guidance, and any reports of early sales on the 9900/9930.

The other embarrassment is that the PlayBook software is still not finished. While the hardware is great, and the tablet works well for owners of BlackBerry phones, it is lacking some capability that other tablets offer, and still not very price competitive. I still want to get one, but I expect a price cut in the near future.

When the next shareholder prospectus arrives in my inbox, I'm going to vote against the top level management. I'm not sure how many others will do the same. Until something is done to make BlackBerry phones desirable to new users of smartphones, it appears that the company is sitting on their history, and growing at a pace slower than the overall smartphone market.

koboss

heres looking to a brighter future for Rim with there recent cuts, its a great company and a cash making machine Rim will be back on top once again.

JimmyBX

Simple facts here. When you're not hitting expectations, employees are fired. Obviously, RIM is failing somewhere. If it were doing as well as expected, you would be hearing about growth. Spinning it wont trick those who have worked for a company that had to fire employees when numbers aren't met. That's what's happening with RIM at the moment. RIM needs a HUGE winner soon, because more and more people will eventually leave and go to the iPhone or Droid.

Maestrodog

When good workers and customers pay for bad management.

Layoffs never work.

Ronindan

RIM is not a huge company, it has less than 30,000 employees worldwide. Losing 2,000 employees is not trimming "the fat".

lnichols

I'm sure there is overlap, but it seems like management is being moved around and not trimmed. Poor management is what got them to where they are now.

sk8er_tor

Didn't RIM just announce that they will now be manufacturing BlackBerrys in two new countries? Perhaps this is the reason for the job cuts?
Also, don't forget that RIM has been on a shopping spree buying up several new companies. So they are buying in new talent and getting rid of the old useless talent that no one wants. Is that such a bad thing?

Maestrodog

What kind of management generates old, useless talent?

While there may be some measures of truth to what you say, when you look at the forest for the trees apropos RIM, there's no lipstick glossy enough to want to kiss the pig.

Not to say they won't survive somehow, for example if they completely revamp their marketing, but it won't be with my investment dollars. If they don't step up big time to keep up with their competitors, it won't be with my consumer dollars either.

Small layoffs due to mergers and acquisitions are one thing. Deep and widespread layoffs, however, are always a sign of endemic failure and desperation and must be accompanied with significant resignations and removals at the top to have a chance to break the cycles of moribund performance.

For my money, layoffs never work.

kelton

Did they fire the dudes who wrote those "open letters to RIM"? hmmmmm

glinc

If RIM hires Steve Jobs, watch the company rise from the grave!

Maestrodog

and watch any hope for enterprise-grade privacy and security die.

Overpriced fruitylicious bells and whistles are all fun and angry birdzzz until your secret GPS file winds up in the hands of your wife's attorney.

P.S.

RIM ever hands me an 88-page user agreement that needs to be updated quarterly, I'll use two dixie cups and a string before another Crackberry.

Don't call my bluff.

EchoTango

Mass layoffs are simply window dressing for Wall Street so senor management can be "seen" as doing something decisive in a crisis.

Even though I'm a RIM investor, I'm not one of those who look to solve company problems by letting go employees. Management made the decision to hire these folks and they all should be doing productive work and if they're not, its never the fault of the workers. Management at all levels need to be held accountable for their individual areas as part of their everyday activities.

In the next few days, 2,000 families will be seriously questioning the future and setting aside future plans, whereas the senior management will retire to their large homes in nice neighborhoods to contemplate where to take the family on their next vacation.

In my view the "shake-up" at the top was needed but did not go nearly far enough. I agree with some of the commentators that those who caused this debacle need to be held accountable and in this instance, those who are overseeing the recent poor performance had their responsibilities actually expanded.

pzykotic

RIM and Apple will both fail and for one reason only - they marry hardware/software exclusively together. Android OS and Windows Phone 7 will win the day in the end because they can get their software platform out to as many customers as possible through vendors and OEMs whose sole job in life is to innovate hardware and mass produce.

italianstylzzz

as a blackberry owner of several devices.... this does not look good. This is the beginning of the end of RIM. They can come out of this? yet to be seen really. I would seriously recommend to them to look at other companies who scraped bottom of the barrel and came back with good numbers. One example for them is GM, 1 of many things they have now implemented 160k warranty for 5 years which is incredible for the products they make. That alone gained confidence in their products. How RIM would relate to them is very close, they both make products that people need, both of their products are disposable (average car kept for 6 years max). RIM should really add value for the dollar, and sense of security with there products. Restructure can mean many things, but in the end is how people like me or you perceive it. Consumers saw GM as a failing company, and no one was buying there products as a result. Same will happen with RIM. They must pull out incentives to buy their products if they want to survive........to be honest, I do not think they will pull it off with the current "head of command"

katiepea

lol @ this having half the comments of eric schmidt using a BB, priorities people, actually, the two are likely very closely related. sounds like RIM is nearly at a "purchasable" state

RyanEMT

Very sad news, prayers for the employees let go. The problem I see with large companies these days is that they are doing things in reverse. Instead of cut the workforce from the bottom, how bout they tighten the belts up top? Taking a paycut up top would leave the workforce down below to do their job, instead of putting more work and stress on the employees who remain after layoffs. I was recently laid off also and I don't understand why the grunts at the bottom are released for the mistakes that the management at the top make.

experiment 626

Those 2000 jobs just went to Argentina.

Alexmam

and to Malaysia.

To those who are saying bad about RIM management:

There is a reason why Jim and Mike have millions and you are still working in Mcdonald's...

jkrist

I hope that those getting laid off get something good really quick or at least that RIM pays them good severance packages. I cannot even start thinking about the employee morale right now at RIM. Why should you come to work when you are not even sure whether you will be continuing with your employer or not?

MillerBerry

So ... they put 2,000 people out of work (yes, that's what cutting jobs and 'slimming down' means...) and they put that bit of news in the 9th paragraph of their release.

Does Canada still have journalists? Yes, they do. I hope the CBC had a good time with this.

RIM -- "We're just like the others."

Jaredius

RIM's answer to dissent from within.