RIM to cut about 5,000 jobs; delays BlackBerry 10 launch

PTI | | Updated on: Jun 29, 2012

BlackBerry—maker Research in Motion (RIM) has said it will cut around 5,000 jobs as part of a restructuring plan and also announced delay of the launch of its new phone operating system — BlackBerry 10, until the first quarter of 2013.

The company which posted results for the latest quarter said restructuring efforts are underway that will include a workforce reduction of around 5,000 employees.

This is part of its efforts to realise over $1 billion in cost savings and is expected to be completed by the end of fiscal 2013, it said.

The Blackberry 10 smartphone was being deemed critical by experts for the struggling company’s survival.

In a statement late last night, RIM said the integration of key features and the associated large volume of code into the platform has proven to be more time consuming than anticipated.

Accordingly, RIM now expects to launch the BlackBerry 10 smartphones in market in Q1 of calendar 2013.

After several delays, the first phone with BlackBerry 10 was expected later this year and with this announcement it has been delayed further. It is now expected to be launched months after a new iPhone is expected to be released.

The RIM President and Chief Executive Officer, Mr Thorsten Heins, said the company’s top priority going forward is the successful launch of its first BlackBerry 10 device.

“RIM’s development teams are focussed on ensuring the quality and reliability of the platform and I will not compromise the product by delivering it before it is ready. I am confident that the first BlackBerry 10 smartphones will provide a ground-breaking next generation smartphone user experience,” Mr Heins said.

“The company expects to incur restructuring related charges of around $350 million by the end of fiscal 2013, primarily associated with the global workforce reduction,” the statement said.

Revenue for the first quarter of fiscal 2013 stood at $2.8 billion, down 33 per cent from $4.2 billion in the previous quarter and down 43 per cent from $4.9 billion in the same quarter of fiscal 2012.

During the quarter, RIM shipped 7.8 million BlackBerry smartphones and around 2,60,000 BlackBerry PlayBook tablets.

Shares of the company tanked as much as 14 per cent after the release of the results and the announcement about the delay of the BlackBerry 10.

The company said it expects challenges in the coming quarter.

“The company expects to report an operating loss in the second quarter of fiscal 2013, as RIM continues to invest in marketing programmes and continues to work through the transition to BlackBerry 10, as well as the company’s fixed costs being allocated over a lower volume of shipments,” the statement said.

Published on June 29, 2012
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