Research In Motion Commences Job Cuts

by Jordan Richardson on June 21, 2012

In a bid to save $1 billion in costs by the end of fiscal 2013, Research In Motion has commenced a round of job cuts.

In May, RIM confirmed that there would be “significant job cuts” taking place and it looks like that plan is underway. This is all part of a broader restructuring plan designed to get the Waterloo company out of their death spiral and back into respectability, but cuts alone won’t solve the problems plaguing RIM.

On news of the cuts, shares in the company dipped 52 cents (or five percent) to close at $10.44 on the Toronto Stock Exchange.

The plan appears to be to scale back about 2,000 jobs from the company’s 16,500 workforce. There is the possibility that there could be more job losses, however.

Tuesday saw RIM’s sales, human resources and manufacturing divisions served with pink slips. More layoff notices were said to go out on Wednesday. “They are letting people go in big waves right now,” said a person familiar with the matter. “RIM has been quiet on the numbers and the process under way largely to shield employees who have still to hear the news about themselves.”

Several senior executives have already been shown the door, while some parts of the multi-national company’s overseas operations are being scaled back.

“[H]eadcount reductions are part of this initiative,” a RIM spokesperson said on Wednesday. “RIM has reduced some positions as part of this program and may continue to do so as the company methodically works through a review of the business.”

RIM’s reluctance to shed exact details on the job cuts is understandable, but it makes reporting on the specifics a bit of a challenge. The company is attempting to keep the specifics out of the news and that’s admirable, but investors have to be wondering what the exact digits are and how the numbers could impact the company’s bottom line.

It is expected that RIM will colour in the gaps when it delivers its earnings report next week on June 28, but nothing is for certain right now. The company says it’ll offer a “business update” at that time, which could just be another way to highlight the fact that RIM will be operating at a loss.

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Written by: Jordan Richardson. Follow by: RSSTwitterFacebook, or YouTube.

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