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< >

The rumored layoffs at Research In Motion are a necessary evil

:(
By Chris Umiastowski on 28 May 2012 12:58 pm EDT
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Layoffs ... It's never a fun topic to discuss. But we have to address what's happening and talk about it openly and honestly.

Over the last few days we've seen many references to another big round of layoffs at Research In Motion. And quite honestly, while it's just a rumor at this point, it makes perfect sense.

Before we talk about RIM, let me say that this article is not about putting a positive spin on something. Layoffs suck for many of those affected, at least in the short term. Before I started my career in financial markets (2000 through 2011) I lived in Ottawa and worked as an engineer for Nortel Networks. With a lot of luck involved, I left Nortel behind about 6 months before the big round of cuts made under CEO John Roth. Little did I know that most of my Nortel friends would eventually lose their jobs.

It was painful for everyone involved. But you know what? These people made it through. They moved onto other, more rewarding jobs. Most of them are happier now. So, while layoffs do suck, they are often necessary and they push people to make changes that ultimately make them stronger. I've watched this happen at dozens of companies over the years. So let's talk about RIM.

RIM has 16,500 employees, give or take a few. This is down from a peak of about 20,000 when BlackBerry was still dominating the market.

There is no denying that RIM needed to make a big shift in direction. They bought QNX and started working on a next generation OS to support the next decade of mobile computing. Yet most of the software employees at RIM were logging hours supporting the legacy Java operating system.

When companies grow, they usually get a bit fat. Lots of project managers get hired, and engineers are hired to support these projects. The people that get hired are unquestionably smart folks, but they get hired based on the skills required at the time.

Under CEO Thorsten Heins, RIM has transitioned into a company that is wholly focused on delivering BlackBerry 10. For the thousands of employees (particularly software engineers) who have been keeping busy on anything tied to the legacy BlackBerry OS, there are only two possible outcomes. Either they find a way to move onto newer, more relevant projects to the company's future, or they leave.

Many will leave by choice. They'll see the writing on the wall. But most will not. And that is not a criticism. It's just the way the numbers tend to shake out. Most people wait for action to be forced upon them. That force, perhaps this week, is expected to be a round of job cuts.

Given the size of the old RIM, and the length of time they've been hardcore focused on BlackBerry 10, I'm betting that there are thousands upon thousands of people who won't be doing the same job at RIM next year. Many of them may make their way over to newer projects. And we're sure many already have, as Thorsten Heins told Kevin during his interview shortly after Heins became CEO. But many will not. So I'm not surprised when I see job cut estimates as high as 5,000.

At BlackBerry World in Orlando earlier this month, Thorsten Heins spoke to the press and explained that BB7 would be maintained in Raleigh, North Carolina, by a team of software developers. That pretty much confirms that Waterloo will go through a major round of cuts.

Some stories are suggesting that layoffs will be announced this week. The obvious reason for this is to be able to account for it in the current quarter, from a financial reporting standpoint. RIM's fiscal Q1 ends June 2nd. Layoffs cost money and those expenses are reflected as unusual items on the income statement. RIM will want to claim as much of the expense in Q1 as possible, and definitely want to finish restructuring before BlackBerry 10 hits the market. They'll want clean numbers to report from that point onward.

So are layoffs bad news? Good news? No, they're just the natural course of action for any company going through the kind of transition RIM is going through. They are a reflection of the past. They don't make it any easier for RIM to fix its current market problems.

Keep this in mind when and if the news hits. There will be a bunch of stories written about how RIM is in such trouble. Remember that layoffs are a backwards indicator. They're the result of something that already happened. They are expected, from RIM, at this point.

51 comments

SurrealCivic

I have been saying this through comments, forum posts, and Twitter (@SurrealCivic) for a long time now:

RESEARCH IN MOTION WILL STOP MANUFACTURING HARDWARE AND FOCUS ON SOFTWARE AND SERVICES!

Research In Motion is going through a transition like never before. Having lived in Waterloo for over 15 years, I have watched RIM from pretty much infancy to global smartphone leader to where we are now (struggling to compete in this market with the likes of Apple, Google, Microsoft, etc).

Research In Motion has built some great phones throughout the years; the Curve, Bold, Pearl, Storm, Torch, Style series. Albeit some were poorly executed on (ie. Storm) and some never fit into the current market (Style). But most were winners. The BlackBerry Bold is one of the greatest QWERTY smartphones every created, to this day. The BlackBerry Torch was a great way for RIM to incorporate the QWERTY keyboard into a touchscreen slider. The Curve, probably the most successful consumer smartphone RIM created. But as the years went on, competition increased, input prices increased (commodities), costs of labour increased (worldwide); it has proved to become too expensive for RIM to manufacture hardware. I know the truth is sometimes hard to swallow, but this is a fact.

YEAR OVER YEAR, GROSS MARGINS FROM HARDWARE SALES ARE TANKING AT RIM!

Gross margins are the percent of total sales revenue that the company retains after incurring the direct costs associated with producing these goods. Therefore, the higher the percentage the more RIM makes from each dollar of sales.

On a GAAP basis, hardware gross margins of Research In Motion:

42% FY 2010
36% FY 2011
20% FY 2012

Now introduce less revenue on hardware, year over year, and you have RIM losing money on the manufacturing and selling of hardware!

Look at the competition out there, Apple (with FoxConn), Google (now with Motorola), HTC, LG, Samsung, Microsoft (with Nokia). And smartphones are becoming cheaper and cheaper each year, while input costs and labour keeps on rising.

Solution: Research In Motion needs to exit the hardware business!

SOFTWARE IS THE WAY TO GO

Research In Motion purchased QNX Systems from Harman International over two years ago. They have had time to develop it into a mobile operating system that can actually compete with iOS, Android, WinPhone. And not only that, they have an OS that can be used across many different applications and industries (Automobile, Airplane to name a few).

They have been spending a lot of money on the new QNX-based BlackBerry operating system. From the design process, to attracting developers, to building the tools to develop for this OS.

It is clear now, the focus is on software. They also have their services business which has high margins and makes them approx. $1B per quarter. They also have many patents.

RIM needs to exit the hardware business, focus on software, innovate their services (a long the lines of what Balsillie had in mind) and cash in on their patents (either through patent selling, licensing or even trolling).

RIM is going to look very different a year from now, and it will be better for the company and for consumers!

Thanks for reading my comment.
Martin...

For more analysis on RIM please visit my Twitter (@SurrealCivic)
http://twitter.com/SurrealCivic

br14

Not sure if you already knew this but RIM doesn't actually manufacture the hardware itself.

And even with tanking hardware margins, RIM still makes most of its revenue from hardware sales.

And just how are they going to sell software when their software to date has been universally panned?

Finally, there's this rather large elephant in the room called Android.

Given away free (more or less).

Why would anyone license RIM software when they get can Google for free?

Unless RIM is going to build an advertising empire, I think they're stuck with hardware for a while yet. If only as a platform on which to demonstrate their software superiority.

SurrealCivic

Regarding RIM not manufacturing their phones, that is like saying that Toyota doesn't manufacture cars. Of course RIM doesn't make the chipsets, LCD screens, etc. However, they do have assembly plants, just like Toyota, that assemble the phones. RIM also does the research and development, engineering, quality assurance, and testing.

RIM does make a lot of it's revenue from hardware. Not only has this revenue been decreasing quarter over quarter but the profit that they make off this hardware has been drastically falling (like I mentioned in my previous comments about margins). This is mainly because consumers want less expensive phones, but input costs and labour costs are increasing (which RIM has to incur).

Regarding Android, this is a fragmented mobile operating system. Most Android devices out there are running a nearly two year old operating system (Android 2.3.x). Also, Android is quite unstable, buggy and full of exploits (which obviously reduces security). Also, Android isn't free. Google makes a certain amount off every unit sold, I believe it is approx $2 from every unit.

RIM doesn't need to build an advertising empire, all they need to do is license their software to a large hardware manufacturer (one that sells hundreds of millions of units). This bring my to my next point.

Google knows that Android is fragmented, this is exactly why they purchased Motorola. It is evident now that Google didn't purchase Motorola only for it's patents. Google purchased Motorola so they can manufacture their own handsets with their own version of Android. This will leave some of the other hardware manufacturers out to dry (mainly Samsung which sells hundreds of millions of devices a year). This could lead to a company like Samsung to look for another operating system that will be able to compete with Google's Android and Apple's iOS. BlackBerry OS 10 could be this operating system. And if Samsung did license BB OS 10, this would be a win-win situation for both Samsung and RIM. RIM could even license/sell some of their wireless hardware patents to Samsung.

br14

My understanding is RIM uses contract manufacturers to build most phones and the Playbook.

Unlike Toyota, who assemble all their cars except where they partner with other auto manufacturers.

I entirely agree that RIM may ultimately court manufacturers like Samsung, but I'm convinced RIM will continue to design and sell many devices.

And my point was that with Android being free and very popular software Samsung would be nuts to license anything else at this point.

Only when Android becomes a competitive drag will Samsung switch (unless RIM gives away BB10 which kinda defeats the argument). Samsung are embroiled in IP cases all round the world and paying significant license fees as a result of litigation. So perhaps they'll eventually give up with Android - but they're making money right now so I'd say it's a little way off.

Motorola has numerous IP cases underway all over the world. Sometimes as defendant, sometimes as plaintiff. There's little doubt Google bought Motorola to defend Android - particularly after they lost the Nortel IP bidding war. And since Motorola was using Android already, they automatically become smartphone manufacturers (though hasn't the deal only just been ratified?).

SurrealCivic

RIM used Quanta to build the PlayBook, however they have always manufactured their handsets in house (plants located in Canada, US, Mexico, Hungary, etc).

SuperionMaximus

If they exit the hardware business then you are correct they will be a software and service play. However, if they exit the hardware business, every penny spent on BlackBerry 10 is down the drain as the "mobile operating system that can actually compete with iOS, Android, WinPhone" will not ever be put on hardware that will compete with those platforms. RIM will instead rely on revenue from products such as Mobile fusion and providing services to carriers through their world wide network such as Jim B.'s plan to use the NOC to allow carriers to offer low cost messaging and social networking plans without springing for a full on Data package. This will be the business RIM will be in. if RIM exits the hardware business they will not be a consumer facing company at all. They will instead provide software and services to enterprise just as QNX did until purchased by RIM. There would be no need for a competitive consumer friendly UI like BlackBerry 10 in that RIM. No one is going to license BlackBerry 10 to put on phones or Tablets.

HorizonXP

I posted some comments about this over at Hacker News. If you want to see the string of comments I've posted, head there http://news.ycombinator.com/item?id=4031163. This comment was the first in that series.

Disclaimer: I used to work for RIM as a co-op student 8 years ago. I am not a current employee, but I have been an avid BlackBerry user and developer.

IMHO, these layoffs are long overdue. RIM has been growing for years under the BlackBerry OS and failed to adapt to a changing marketplace. The iPhone really blew them out of the water, and the BlackBerry Storm was a terrible attempt to try to answer that threat. The BlackBerry Java OS is old, dated, and does not have the infrastructure needed to compete in the marketplace of 5 years ago, let alone today.

That's all changing with the adoption of the QNX operating system on the BlackBerry PlayBook and BlackBerry 10. People may lament the mismanagement of the launch of the PlayBook, and I would mostly tend to agree. However, RIM has delivered a solid base from which to build upon, and they're doing all of the right things. To this day, we're still figuring out all of the nuances of the OS and what can be done with it. Quite simply, QNX is fast, secure, and well-engineered. IMHO, it is leaps and bounds ahead of what iOS or even Android are capable of.

These changes are also being reflected at RIM itself. Their acquisition of QNX several years back was a masterful move. And even though RIM bought QNX, the culture seems to becoming more QNX-like, which is a great thing. (It's almost like a reverse-takeover.) They're adopting many of the lean startup methods in driving their products forward. One can point to the delivery of Dev Alpha prototypes to developers back in early May. Put out a minimum viable product to your early adopters to gather feedback and figure out what to build next. As developers, we have the opportunity to have a platform built to our needs, rather than the other way around. It smacks of lean startup methodologies.

My rambling does have a point: these layoffs are likely in the old and slow departments of RIM's past, related to the older BBOS. BBOS is going into maintenance mode, as it seems like they are no longer developing new features for it and are reserving it for their budget devices. While layoffs always suck because people are losing their livelihood, I think it's a great move on RIM's part to become leaner and more agile. They have the capability to deliver something truly wonderful with BlackBerry 10. The building blocks are all there. I'm personally hopeful they will execute it well, because that's ultimately what will determine their fate, whether they end up like Palm or like Apple. Only time will tell.

Founder of Pulsecode Engineering and taab

Desktop Bridge for the BlackBerry Playbook
twitter: #DesktopBridge

Chinookman

Thanks for a fresh perspective. I want RIMM to succeed for many reasons. I am becoming a great despiser of Google and all of its privacy intrusion mentality.

Let's hope RIMM has a stellar roll out of BB10 and a solid platform with minimal OS issues. Can't stand watching a 160$ stock tanking to a < $5-7 a share at this rate.

Rub3n5

Interesting perspective, thanks for sharing.

greatwiseone

Another good article from Chris Umi. I've made similar comments in the forums. My understanding from talking with ex-RIM employees is that there is a significant mis-match between the skills of the current BBOS dev's and the BB10 dev's. Many people are finding the transition from J2ME to C++/Qt to be quite difficult.

gspeng

Since Patrick Spence resigned/jumped ship?? last week, RIM stocks have be dwindling almost as fast as Nortel's did years ago, and we know what happened to investors there. If RIM does not get off of their ass REAL FAST, they will be heading down that Washed-up road. They maybe still around but doing not much to impress anyone, is this the route RIM is heading, maybe they should merge? Come on RIM, you still have support and customers out here, you need to get off of your corporate ASS and get things moving a LOT faster, you are dragging your feet TOO DAMN SLOW and drastically loosing this Company/Tech race/customers.

SuperionMaximus

Didn't you read the article? RIM is right in the middle of a complete platform shift the likes of which has never been pulled off successfully in mobile before. Palm tried it, they sold Palmsource (legacy Palm OS spun off into it's own company) to Access. Nokia thought about it, but didn't have the stomach for it and decided to throw their lot in with Microsoft and let them do the heaviy lifting and ecosystem building for them. They sold off Symbian to Accenture.

But there's no more companies left with the first three letters "Acc" looking to buy an outdated mobile OS so RIM is forced to make the tough choice and lay off the majority of folks who were associated with the old OS. Mr Heins made reference to RIM still having some "fat on our hips" at BlackBerry world foreshadowing the coming layoffs.

The one thing that RIM has to do in order to stay in the game though is get BlackBerry 10 right. the CAN'T rush out the new platform or they will be ripped to shreds by the media and accused of changing nothing within the company and releasing yet another half baked product like the original BlackBerry Storm and the new Platform would be dead right out of the gate no matter how much potential it has. We all know that the new platform is the best in the world and full of potential, but RIM has been failing to deliver on that potential on the PlayBook and consumers will not give them another chance with BlackBerry 10. It has to be feature complete and offer a competitive experience with Windows Phone 8, iOS 6, and Android 5.0 Jellybean at version 1.0. That's no small task and not one that can be rushed. RIM is giving Devs the best tools in the world to work with and the 100 million dollar investment they are making into growing the ecosystem should help with the app gap, but if the OS launches without polish, consistency throughout, a compellingly simple interface and missing features or half assed jobs on basic features

gspeng

Looks like this will take RIM 4-6 (September-November) months to get done, complete, test and launch to user's? They are drastically sinking right now, do you think they will still be above water then?

NamelessStar

Sadly i was effected by this almsot a year ago so i know very well how it feels but i have never lost my respect for RIM, I understand better than most it is sometimes needed to help people see that change is being made. However i have full support for this company as they fueled and built my home town of kw they put tons of money into the universities and is the golden egg of Canada. I hope that this new system of BB10 is their new lifeblood i will be one of the first buyers when that does hit the market.

bldshd

Great article.. Btw hell yea latoffs suck! I lost my job over a year ago & my unemployment is about to run out and I honestly don't know what ill be doing in the near future. I haven't been able to find any work. I live in N. America, & the economy is still very bad here. I'm 31 & I've been workin non stop since I was 16..... Wish me luck

Jtaylor1986

Hi Chris,

Good article, my thoughts were largely along the same lines. My only question is why is the BBOS being maintained in North Carolina? Does RIM have a development team there?

greatwiseone

I wonder if RIM is going to outsource development of BBOS the same way Nokia did with Symbian...

Kevin Michaluk

RIM does have offices in NC:

http://www.rim.com/company/maps/index.shtml

kraski

Is Waterloo big enough that RIM needs 25 separate addresses there? :D

SurrealCivic

Over 500,000 people live in the Waterloo Region

Jtaylor1986

Does anyone have a rough idea of how many employees actually were involved in BBOS development though anyway? I can't imagine it was large enough that even the majority of these potential layoffs were just java software developers. I have a feeling it is right sizing the whole organization and many positions were not redundant but cash conservation is the number 1 priority right now.

br14

"I have a feeling it is right sizing the whole organization and many positions were not redundant but cash conservation is the number 1 priority right now."

Agreed.

Having said that I'd bet at least 30% of the organization was made up of developers of one kind or another.

And RIM uses Java for lots of things even if BBOS is being replaced.

Finally BB OS is going to be around for years. It will take RIM several years to roll out BB10 with equivalent price points to their existing offerings. Indeed, perhaps they'll always use BB OS for entry level devices.

menaknow

Good article.

I think Chris said it best when some will see the writing on the wall and leave. Others will not. But he missed one more...

Few will wait to be packaged out!

br14

I doubt the layoffs have much to do with the old OS, which frankly wasn't (isn't) as bad as is made out in ealier posts. BB7 phones are excellent at what they do well.

And we'll see how well QNX works out. Frankly I'm not impressed with RIM's approach to phasing in the new software - but that has more to do with licensing and legal issues than technology. RIM will have to support and enhance the BB7 OS for several years yet or it will have nothing to sell. I doubt they'll have a low cost BB10 phone for a long time to come.

The layoffs have everything to do with the core review announced by Heins recently.

RIM expanded rapidly, contrary to Chris's comment AFTER the iPhone came on the scene (they were growing staff quickly before just not as quickly).

In 2005 they still had only a couple of thousand employees. It was 2007/8 when they were hiring anyone that could stand on two legs. And no doubt the usual suspects (middle managers) built empires of their own.

Had Jim Balsillie any prior experience of large enterprise perhaps he'd have been more cautious how he grew the company.

Heins knows exactly how large enterprises work and it shows. You can't get much bigger than Siemens.

My guess is he'll slash costs all over the company and get margins back on track. Which is really what is needed to restore confidence in the share price.

peterallcdn

Haha... I like the alt and title tags for the photo... " :( ". Although this wouldn't really explain the photo to someone who is visually impaired, it still feels quite appropriate.

Chinookman

WELL C-R-A-P!!!! after playing all weekend w/ a Galaxy Tab 10.1 and loving the size of it guess I can forget RIMM ever adding to the stable of PB to compete.

That really chaps my hide cuz hem-roids and google stink on ice for security. AND if you folks followed any of what google is doing in a adjustable king size bed with NSA, TIA DARPA and it's former directors now on board with google you'd have good reason to be pissed at having RIMM tank!
Try this on for size as a teaser: http://tinyurl.com/csdeaoh

Yeah the arrogant bastards are just as if not worse then DHS and FEMA combined.

So to watch RIMM falter stumble and look like a feeble start up is just so stinking disgusting....

SuperionMaximus

I doubt that RIM will exit the tablet business anytime soon as they are trying to become a mobile computing company and they HAVE to have a successful tablet play to make that goal happen. I agree they need to launch ALL NEW playbooks in several sizes and they need to throw a ton of cash at TomTom to make sure those tablets are the absolute undisputed goto tablet for in vehicle navigation and infotainment. RIM needs to leverage their strength through QNX in auto. BB 10 phones and tablets NEED to work better with cars infotainment systems then anything else on the market. Part of that is a strong Navigation offering and since they don't own it, and don't want to buy it from Nokia they need to get closer to TomTom then they are now.

But don't count a 10" playbook out yet. The original was canned, but so was the colt which we know of as DevAlpha. That does not mean that there isn't a second gen Playbook in that size in the works. At least I hope so.

br14

"But don't count a 10" playbook out yet"

RIM are masters at engineering small devices. They could create a 10" tablet in their sleep.

It's going the other direction that is the problem. Hence the reason you don't see small profile Androids and iPhones.

Squeezing function into small packages isn't simple.

koool1

Feel bad for the people involved, I've been laid off from a bank so I know the feeling.

RIM needs to restructure and no, its not pretty. Hope to see a new RIM and new BB10 phones by the fall. I have my $$ ready, bring it!

pinkert11

I feel bad about layoffs as well, but as the article notes sometimes it is the best for the company and the person. My wife was also laid off from a bank. She worked there right out of school as an intern all the way up to middle management. However, she never liked the hour commute and being away from our kids. Now she works 10 min away for our school board, sees the kids a lot more and works from home most Fridays. If she was not laid off I am sure she would still be at the bank enjoying her job, but her life balance would still be out'a whack.

lonedog

Great article Chris and some great responses.

I doubt RIM will be getting out of hardware anytime soon, they need to be able to put their software in something.

You know what really sucks? Being a current RIM employee and hearing the rumors in the news for two full weeks and not hearing anything about the rumors from RIM management. It makes you wonder, will there be a job to go to tomorrow? Ever since the rumors started last week morale has taken a nose dive as everybody begins to wonder, who's getting cut?

br14

While recognizing your concern, you don't need to be a fortune teller to see layoffs when reading between the lines of what Thorsten Heins has been saying.

But I doubt there'll be wholesale layoffs. More likely a gradual downsizing. Last I heard RIM were hiring.

lnichols

Thor installing people accountable to him in place, and those people will in turn do the same with people under them. I'm sure the iFans and Fandroids will be be posting every negative article that they can when the announcement happens and say RIM is dead like they always do. This is a necessary step in the migration to the new platform. Let's just wish those who do lose their jobs find new ones quickly, and that RIM gets the structure in place to deliver BB10.

Yasch22

Question: Are these layoffs or terminations? I mean, is RIM simply laying people off for the next 13 weeks? My understanding of labour law is that RIM can lay employees off for up to 13 weeks before deciding whether to make those layoffs permanent or not. If RIM keeps paying benefits to the laid off employees, I believe the layoff period can extend to 30 weeks. If on the other hand these are terminations (or firings, or permanent layoffs), that's where the costs would come in, because RIM would then owe a week of pay (plus vacation pay) for every full year of employment per employee.

Also, most of the rumoured reports suggest the layoffs will focus on divisions other than coding/software. The list we've seen so far includes legal, marketing, operations, etc.

Chris Umiastowski

We're talking about terminations here, not temporary layoffs.  With respect to the target being software devs, that's not what I meant.  Yeah, software types will be hit.  But I said anyone tied to legacy stuff is at risk.  This includes the divisions you mentioned.   

Yasch22

Thanks Chris. I'd been wondering about this for a couple of days, as it was making some sense to me that RIM might lay some people off during the summer doldrums and then hire them back when BB10 is off and running. Alas for those being terminated....

jivegirl14

It must be really terrible hearing the news about impending layoffs in the press and forums before hearing from your own company/managers. I really feel for you all. Very sorry.

HabsSuck

Very true, someone at RIM has a big mouth

terminatorx

"RIM has transitioned into a company that is wholly focused on delivering BlackBerry 10. For the thousands of employees (particularly software engineers) who have been keeping busy on anything tied to the legacy BlackBerry OS, there are only two possible outcomes. Either they find a way to move onto newer, more relevant projects to the company's future, or they leave. "

I'm not sure if I agree with the author's (and other commenters) highlighting the layoffs as relating to the "legacy OS" software developers. I also don't quite like the way people make it sound like the current BlackBerry OS is some old dusty idea. There are 70 million subscribers out there. It's a proven and working platform that some customers may choose to stay on even after BB10 comes out. So all of a sudden RIM is laying off everyone relating to the existing BlackBerry Java OS? That would mean there there will be no more OS updates or bug fixes, desktop manager updates or other short term feature improvements. Do you believe this? I certainly don't.

I see some people who think because they did a little stint at RIM or another IT company where layoffs occurred, thinking that they are fully qualified to talk about matters which they don't know much about.

It's obvious the company is a little high in employment numbers, but none of you know who is being removed or exactly why. So please, let's take it easy on the analysis.

belle.epoque

I was one of those who was laid off last year. I don't think RIM handled the layoffs in necessarily the best way possible, making many of those whom they laid off bitter in the process. However fast forward half a year from "The Incident", I found myself something new and most of those who were also laid off with me also found new jobs to be excited about. I don't think I bear any ill will now and I believe things happened for a reason. I still have many friends who are still in RIM and I certainly do not wish for them to have the same fate as I do. Some people think getting a retrenchment package is like striking lottery but I have a family and I prefer to have job stability. But of course now that I am employed again, I could say that things happened for the better.

I worked in RIM for a reasonably long amount of time and I have a lot of feeling for this company because I was once very proud of it. For the sake of my friends who are still in the company, I hope RIM will find its foot again. It is not easy to work in a company with low morale with the public focus being so constantly negative and hopefully the press goes easier on them. If a layoff is necessary, I also hope RIM would find more empathetic ways to go about it.

eve6er69

I've been saying this to all my anti blackberry friends that have heard the rumors about the layoffs.
i am sure apple doesn't have the same people that were specialists in the track wheel design on the 1st ipod sitting around milling on some new ideas.

chris you have become one of my new favorite blog posters on the site. your very insightful and respectful of the position that rim is in. you make no question in your writings that they are in deep trouble, but you write about it so well. you understand business strategy's and the importance of bb10 to the company, yet you remain positive in the end of your articles leaving us with a good whole hearted feeling about rim at the last period.

keep up the great work man, it is much appreciated around here with the hero and doom and gloom type.

johnrose16666666

The problem with RIM is its ability in the face of the competition - 5 years ago there are Four competitors MS Nokia Android and Apple.

Now its down to 2 and a half - with Windows being the under dog!

it doesnt help that the founder and CEO of RIM have for so long being in the way of revamping the OS and bring in the much needed update the rang of product on offer and the innovation that is necessary in the rat race.

through playing catch up with the St Jose rivals RIM have lost touch with Its existing customers and alienated its potential customers.

Developing products thats ill suited to either segment of the community.

I guess the best way forward is for RIM to develop a two prone strategy:

A mass market blackberry brand to complete with the likes of Android and Apple. With the BB10 platform smartphone and if possible tablets! Such platform should have included a strong presence of App markets and encourage developers to play a core part of the phones strategy.
The Application ecology of the IOS and ANDROID platform is what draw users to their fold!!

An enterprise Blackberry that work with the existing OS6/7 with focus mainly on the corporate market and individual users who prefer the simplicity of the phone and tablet at hand.
This particular segment of the market is highly task orientated and the use of the phone is pretty much like a tool, its serve as the terminal or communication hub of the person, phone users in this category are not interested in the availability of the application but would prefer to have a robust phone that would work in most condition and if possible business application and utilities that would allow them to go the extra mile when it comes to a smartphone.

Something like a Tough phone designed for Blackberry, a globalsat/iridium satellite version of the Blackberry would have been a market KILLER mixing the DES/BIS with Satellite operators is a win win situation for RIM!!! - Governments and remote users would have flock to use the device if RIM would have pay more attention to this market segment, who ALL MOST ALL MAJOR tech companies have ignored SO FAR!!!

On the other hand RIM should continue to complete with companies like Vertus and work with luxury brands to create technologies for the luxury market, given its versatility and value of the RIM blackberry brand it wont be hard to sell!

NMIL

Darlaten

I've been rethinking the whole layoff thing over and over and, initially, I was in agreement with what Chris (and others) have presented. Now I'm not as sure. Initially I thought it was a good idea, i.e., trim the fat, get rid of dead-weight, the underperforming individuals, and in essence, become a leaner, much more efficient, machine - that's not a bad idea for any company to do.

But if the numbers being reported this evening by Reuters and the CBC, I'm not so sure how this could be seen as a positive event. Reuters and CBC, both citing "unspecified sources" are reporting that RIM will be removing 40 to 50% of their entire worldwide workforce - in essence cutting the entire size of their company overnight by 1/2. In anyone's book, that is a drastic cut to a business no matter what business it is.

Of course, no one can state with certainty what will happen until the layoffs are announced, but if the cuts are this big, I somehow doubt that the story headlines nor stock prices will be seen favourably.

anon2100101

Good article- if you ignore every individual fate which belongs to layoffs... We talk about around 2000 employee and there family, the future... RIM will not primary laid off high qualified engineers...I assume it will hit the less qualified ons with reduced chances at the job market....
I´m not naive and I understand how this world works: adoration of share price. And I understand also that this layoffs are needful to save RIM (and the profit distribution for all the share holders), but I could puke the hole day, when I resume the liability: Lazaridis and his slumberous bunch have wasted time and money for the wrong decisions and 2000 familys will bear this with a lot of individual restrictions of life... In my opinion Lazaridis and his court drudges should support all this familys with new jobs or money... I can live without a device of RIM and I will not cry for another disappearing of a loser, but I will regret all the individual fate of former employees... (I know- it was not a helpful or analytic comment and I´m far away from the the acknowledge of stock market, but since the mankind becomes to th slave of stock prices I understand the barbarity of dealing with individual- and mass pauperization... May be not the american way of thinking, but I also would deny to wear a firearm)

al6667

Yes, yes, layoffs are a wonderful thing. Please continue to punish employees for management's mistakes.

Companies should be held accountable if they can't ride out the ebb and flow without creating unemployment! Of course, they aren't, because the only metric is stock price and market share.

4ron

If RIM adopts a strategy of "good, better, best" and simplifies their model line up there is no reason they can't continue to manufacture the hardware and maintain control over design, quality, and workmanship. The hardware is one aspect that distinguishes a BlackBerry from all the other brands out there. The mistake of the past has been to offer a phone for every possible user. The market has changed.