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Beleaguered RIM to lay off 2,000 employees, 11% of workforce

post #1 of 79
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Research in Motion, which has seen its BlackBerry lineup struggle against Apple's iPhone and Google Android, announced on Monday that it will cut 2,000 jobs, or about 10.5 percent of its workforce.

RIM's layoffs, part of the company's "cost optimization program," will bring its total global workforce to about 17,000 people. The company called the reduction a "prudent and necessary step" to take after its workforce has nearly quadrupled in the last five years.

"RIM intends to notify impacted employees and North America and certain other countries this week," the company said in a press release. "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."

Also on Monday, the company announced a number of adjustments to its senior management team, with Thorsten Heins taking on the expanded role of chief operating officer for the company's Product and Sales division, Patrick Spence becoming managing director of Global Sales and Regional Marketing, and Jim Rowan taking on the expanded role of COO of Operations.

The Canadian smartphone maker also announced that Don Morrison, who is currently on temporary medical leave from his position as COO of BlackBerry, will retire. He has been with the company since 2000.

"We thank Don for his outstanding service to RIM. We understand and respect his decision to retire after successfully dealing with a serious medical challenge and we wish him a quick recovery," RIM's co-CEOs, Jim Balsillie and Mike Lazaridis, said jointly in a statement. "Don's presence at RIM will be missed, but our senior management and sales teams had already stepped up to manage Dons responsibilities since the commencement of his medical leave and we're confident in the ability of those teams to continue Dons tradition of success going forward."

RIM initially announced its plans to initiate layoffs in June, but declined to reveal exactly how much of its workforce would be axed. The company has seen sharply lower profits while its products have struggled against competitors like Apple.



While the iPhone has outsold RIM's BlackBerry line for some time, Apple's handset was said to have passed the BlackBerry in active U.S. smartphone usage in a survey release in June. Even the U.S. government, which had embraced the BlackBerry for years, is said to have turned to Apple and adopted the iPhone and iPad.

RIM's struggles have led for investors to call for a change in leadership at the company. Specifically, co-CEOs Lazaridis and Balsillie have been in the hot seat.

In late June, a high-level executive at the company sent out an open letter which called for radical changes in RIM's strategy and management. It suggested that the current CEOs may need to be replaced for RIM to once again find success.

RIM quickly dismissed the letter, saying it found it "difficult to believe" an executive in good standing at the company would write it. The company also formed a committee that will look into its executive and board roles and make recommendations on a corporate structure.
post #2 of 79
Beleaguered? Was this article written by Paul Thurrott? One of his favorite adjectives.
post #3 of 79
I've been hoping that RIMM will turn things around. This does not sound good at all.

Their co-CEO's seem intent to drive the company into the ground. The fish stinks from the head on down.
post #4 of 79
Peace out, RIM. We hardly knew ye.
post #5 of 79
I hear that Apple stores are hiring... /badtaste
post #6 of 79
So all that yammering a few months about about how well the company was doing was complete BS instead of mostly BS.
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post #7 of 79
The people responsible for the downturn of the company gets to keep their job and fire the little people that were not responsible for the direction of the company. You have to just love conservative mentalities.
post #8 of 79
Quote:
Originally Posted by Bilbo63 View Post

I've been hoping that RIMM will turn things around. This does not sound good at all.

Their co-CEO's seem intent to drive the company into the ground. The fish stinks from the head on down.

You could just as well be talking about Nokia... what a shame...
post #9 of 79
Quote:
Originally Posted by Curmudgeon View Post

Beleaguered? Was this article written by Paul Thurrott? One of his favorite adjectives.

Only when he was talking about Apple for most of the 90's and early this century.
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post #10 of 79
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Originally Posted by DrDoppio View Post

You could just as well be talking about Nokia... what a shame...

Then there is Microsoft ....
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Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini, SE30, IIFx, Towers; G4 & G3.
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post #11 of 79
As a Theoretical Physicist manqué I feel a bit of sadness about the failure of RIM because Lazaridis has done a lot for the subject in founding Perimeter, but it seems like there is no saving RIM - they have a very short window in which to make a huge turn-around and increasingly they don't seem to understand what it would require.

At any rate they have 2billion in cash and haven't yet gone into the red, so they have a couple of years in which to reboot their business. It's hard to see it happening though.
post #12 of 79
Quote:
Originally Posted by cloudgazer View Post

As a Theoretical Physicist manqué I feel a bit of sadness about the failure of RIM because Lazaridis has done a lot for the subject in founding Perimeter, but it seems like there is no saving RIM - they have a very short window in which to make a huge turn-around and increasingly they don't seem to understand what it would require.

At any rate they have 2billion in cash and haven't yet gone into the red, so they have a couple of years in which to reboot their business. It's hard to see it happening though.

Agreed... Well said.
post #13 of 79
I remember another tech company that, in the mid 90s, had a much worse balance sheet and less market share than RIM...
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post #14 of 79
To-big-to-fail-alert! Bailout needed!! LOL
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post #15 of 79
Quote:
Originally Posted by island hermit View Post

I remember another tech company that, in the mid 90s, had a much worse balance sheet and less market share than RIM...

Yes, they turned around when they brought back in the visionary founder, but what do you do when the visionary founders are the probem?
post #16 of 79
Quote:
Originally Posted by Curmudgeon View Post

Beleaguered? Was this article written by Paul Thurrott? One of his favorite adjectives.

I just assumed Dan Dilger wrote it until I looked up and saw it wasn't him, actually.
post #17 of 79
Quote:
Originally Posted by Curmudgeon View Post

Beleaguered? Was this article written by Paul Thurrott? One of his favorite adjectives.

Quote:
Originally Posted by Shunnabunich View Post

I just assumed Dan Dilger wrote it until I looked up and saw it wasn't him, actually.

What goes around comes around, payback is a bitch, etc. The word was used gleefully when applied to Apple by EVERYBODY and their brother.
post #18 of 79
Quote:
Originally Posted by cloudgazer View Post

As a Theoretical Physicist manqué I feel a bit of sadness about the failure of RIM because Lazaridis has done a lot for the subject in founding Perimeter, but it seems like there is no saving RIM - they have a very short window in which to make a huge turn-around and increasingly they don't seem to understand what it would require.

At any rate they have 2billion in cash and haven't yet gone into the red, so they have a couple of years in which to reboot their business. It's hard to see it happening though.

Steve Jobs did it. Why not these guys?
post #19 of 79
Quote:
Originally Posted by Curmudgeon View Post

Beleaguered? Was this article written by Paul Thurrott? One of his favorite adjectives.

There isn't really a good alternative word though. You could say 'beset' but that normally comes with a qualification, 'beset by falling sales'. They could say 'beseiged' but it sounds too military, 'troubled' sounds too teenager. How else would you describe a firm that's in a very tough but still conceivably survivable situation?
post #20 of 79
Quote:
Originally Posted by lkrupp View Post

Steve Jobs did it. Why not these guys?

Because Steve wasn't the guy who dug Apple into the pit in the first place, he came in with a completely new vision of how to get out. Could an outsider save RIM? Maybe, but it's hard to think who is available who could achieve it.
post #21 of 79
Quote:
Originally Posted by lkrupp View Post

Steve Jobs did it. Why not these guys?

The odds really seem to be against them. It could be said that there isn't another Steve Jobs out there to save them, but, then again... who would Rubin be today if Google hadn't bought Android.

A lot of people have written off Microsoft (in the mobile arena), Nokia, Motorola and RIM... but, it's not like any of these companies don't have the brand recognition and the resources to turn things around... the unexpected can happen at any time.
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post #22 of 79
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Originally Posted by cloudgazer View Post

Yes, they turned around when they brought back in the visionary founder, but what do you do when the visionary founders are the probem?

And there you have it.

It's a little reminiscent of the old GM vs. the imports. First GM mocked them, then failed to understand what was happening even when it was abundantly obvious to everyone else, and finally they got their heads handed to them.
post #23 of 79
Quote:
Originally Posted by cloudgazer View Post

As a Theoretical Physicist manqué I feel a bit of sadness about the failure of RIM because Lazaridis has done a lot for the subject in founding Perimeter, but it seems like there is no saving RIM - they have a very short window in which to make a huge turn-around and increasingly they don't seem to understand what it would require.

At any rate they have 2billion in cash and haven't yet gone into the red, so they have a couple of years in which to reboot their business. It's hard to see it happening though.

...but just because Lazaridis is good at those things (and judging from insider reports), doesn't mean he is a good CEO. Corporate culture is a critical and oft overlooked piece of the puzzle. Left to their own devices, most successful companies grow mature and slowly become less capable to move and change when technology shifts. Managing a constantly and consistently competitive corporate culture requires a high degree of discipline and an eye to future possibilities, as well as preventing "middle-aged spread" from engulfing the company. RIMM is a victim of its own culture. The RIMM BOD could remedy it - if in fact they can recognize what's going on - but they recently appointed a committee to review the situation, so they are locked into corporate culture themselves, and unable to break out of it apparently.
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post #24 of 79
Quote:
Originally Posted by cloudgazer View Post

... RIM - they have a very short window in which to make a huge turn-around and increasingly they don't seem to understand what it would require.

At any rate they have 2billion in cash and haven't yet gone into the red, so they have a couple of years in which to reboot their business. ...

Unfortunately, business doesn't work that way. It's already too late. The layoffs are the first step in the standard business re-organisation that happens in cases like this.

If they are lucky, someone will buy them before the end of the year, or they will decide to give the CEOs the heave-ho and refocus the business on BBM (software) only. If neither of those happen, by early next year at the latest they will be laying off a lot more people and the International business will begin shrinking to the point that even BBM will be a product that no one wants.

It is sad about the Physics donations though. It was also nice to see a Canadian company triumph over the USA technologically, however short lived in ended up being.
post #25 of 79
Investors must like lay-offs... RIM is down only 3.5% on low volume so far today. I see an 11% lay-off and all I wanna do is sell sell sell...
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post #26 of 79
Quote:
Originally Posted by lkrupp View Post

Steve Jobs did it. Why not these guys?

Because Steve Jobs is taken.

He's working for another company now. Just... like... last time, WAIT! Just have Apple buy RIM.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

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Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

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post #27 of 79
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Originally Posted by Tallest Skil View Post

Because Steve Jobs is taken.

He's working for another company now. Just... like... last time, WAIT! Just have Apple buy RIM.

How long do you think the Co-Ceos would last...
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post #28 of 79
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Originally Posted by island hermit View Post

How long do you think the Co-Ceos would last...

RIM gets shut down in this hypothetical purchase... BlackBerry is discontinued and just the patents and a few engineers are kept.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

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Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

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post #29 of 79
Quote:
Originally Posted by Prof. Peabody View Post

If they are lucky, someone will buy them before the end of the year, or they will decide to give the CEOs the heave-ho and refocus the business on BBM (software) only. If neither of those happen, by early next year at the latest they will be laying off a lot more people and the International business will begin shrinking to the point that even BBM will be a product that no one wants.

The problem there is that the current market cap is too high to justify it. It's hard to see RIM as a pure software firm being worth 14BN - that would make it equal to Adobe. So any buyer at current prices would have to believe they could rescue the hardware side too.

The current valuation suggests that investors still believe that RIM can be turned around, we may both disagree with them, but for as long as they continue to believe it RIM still has a window of opportunity.
post #30 of 79
Quote:
Originally Posted by fecklesstechguy View Post

...but just because Lazaridis is good at those things (and judging from insider reports), doesn't mean he is a good CEO.

Oh it sounds like he's pretty terrible as a CEO, his obsession with technical details would be ok if they were technical details that actually mattered to the consumer. Unfortunately for RIM people really don't care if the BB has a better speakerphone than the iPhone.
post #31 of 79
Quote:
Originally Posted by lkrupp View Post

Steve Jobs did it. Why not these guys?

They are not Steve Jobs.
post #32 of 79
Quote:
Originally Posted by island hermit View Post

I remember another tech company that, in the mid 90s, had a much worse balance sheet and less market share than RIM...

It's amazing how few people realize how utterly amazing Apple's performance has been over the past 15 years. It's hard to imagine that anyone else could have done what Jobs did.

For comparison, out of millions of companies around the world, how many have done what Apple did? AFAIK, the answer is 'zero'.

Is it possible? Sure. There could be another great visionary leader out there who just hasn't had the right opportunity. And, of course, RIM doesn't need an Apple-level turnaround to be successful. But, realistically, if RIM pulls it off, it is going to take major changes, a one in a billion leader, and LOTS of luck.
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post #33 of 79
Quote:
Originally Posted by cloudgazer View Post

The problem there is that the current market cap is too high to justify it. It's hard to see RIM as a pure software firm being worth 14BN - that would make it equal to Adobe. So any buyer at current prices would have to believe they could rescue the hardware side too.

The current valuation suggests that investors still believe that RIM can be turned around, we may both disagree with them, but for as long as they continue to believe it RIM still has a window of opportunity.

Agreed.

I guess what I'm saying is that it seems so obvious to me that RIM's hardware hasn't got a chance in the market, that sometime in the next year (or even the next few months), this point of view will become the mainstream view. The company will then collapse a bit further shrinking it's value even more and *then* it will be bought up or taken over.

One never knows though with the recent example of Nokia being basically taken over by Microsoft, long before most observers were sounding it's death knell. Perhaps some entity that wishes to buy RIM can convince the board of the hopelessness of their situation and thus force an earlier sale for less than the current valuation?
post #34 of 79
Quote:
Originally Posted by jragosta View Post

It's amazing how few people realize how utterly amazing Apple's performance has been over the past 15 years. It's hard to imagine that anyone else could have done what Jobs did.

For comparison, out of millions of companies around the world, how many have done what Apple did? AFAIK, the answer is 'zero'.

Is it possible? Sure. There could be another great visionary leader out there who just hasn't had the right opportunity. And, of course, RIM doesn't need an Apple-level turnaround to be successful. But, realistically, if RIM pulls it off, it is going to take major changes, a one in a billion leader, and LOTS of luck.

On the other hand... quite a few people have taken zero and turned it into something... but, yes, it's much much harder (next to impossible) to do once a company's culture has been established...
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post #35 of 79
Quote:
Originally Posted by cloudgazer View Post

Because Steve wasn't the guy who dug Apple into the pit in the first place, he came in with a completely new vision of how to get out. Could an outsider save RIM? Maybe, but it's hard to think who is available who could achieve it.

Steve brought something else than a vision how to get out. He brought a vision about 'being a company'. There is this video where he addresses Apple employees shortly after returning, and it is telling. It is all about 'who do we want to be'. Steve seems to have succeeded in rallying the troops. He also brought a couple of very good guys in from NeXT (next to the good guys Apple already had, such as Ive) and of course his drive for customer experience. Those three together made it happen.

Now, RIM needs to change its corporate culture from the deep roots and the current head honchos are not going to be able to do that. They must have good engineers. But they seem to lack decent designers in terms of customer experience. It'll be a difficult turnaround and I don't see it happening for now.
post #36 of 79
Quote:
Originally Posted by gctwnl View Post

Steve brought something else than a vision how to get out. He brought a vision about 'being a company'. There is this video where he addresses Apple employees shortly after returning, and it is telling. It is all about 'who do we want to be'. Steve seems to have succeeded in rallying the troops. He also brought a couple of very good guys in from NeXT (next to the good guys Apple already had, such as Ive) and of course his drive for customer experience. Those three together made it happen.

Absolutely, he brought a lot of things, he brought a change in the media story too - and a change in customer expectations. There's no one person who could bring everything to RIM that Steve Jobs brought to Apple. Now perhaps RIM bought their NEXT-style engineering talent in with QNX, but the problem is that they still need design talent and 'the vision thing'.

There's also a really good video of his Q&A session after WWDC 1997, (before he became CEO but after his return), and it's telling how completely different his vision of Apple is from the management of the interregnum.
post #37 of 79
This is shocking and totally unexpected. I am so sad.

One of the RIM CEO's said that the playbook was "way ahead" of the iPad and that it was setting the bar higher.

And one of the CEO's slammed Apple for it's "distortion field".

"For those of us who live outside of Apple's distortion field, we know that 7" tablets will actually be a big portion of the market," Balsillie wrote. He argued that RIM's support for Adobe Flash and an approach to developers that is more open than Apple's will give RIM an edge.


These CEO's with their big, ignorant mouths should be looking for new jobs as janitors somewhere, as that profession seems to be what they are best qualified for, since there is a lot of garbage coming out of their mouths.
post #38 of 79
Quote:
Originally Posted by Prof. Peabody View Post

I guess what I'm saying is that it seems so obvious to me that RIM's hardware hasn't got a chance in the market, that sometime in the next year (or even the next few months), this point of view will become the mainstream view. The company will then collapse a bit further shrinking it's value even more and *then* it will be bought up or taken over.

I think RIM still has an outside chance with hardware, it's not like the industry isn't full of zombies already. Did you see S-Es last results? Terrible. This week I think we get Moto's, and I fully expect them to be terrible too. RIM can squeak through as a corporate friendly competitor to Android, but it at least needs phones that compete with mid-priced Android offerings, and ideally it needs a really high-profile android security scare.

Quote:
One never knows though with the recent example of Nokia being basically taken over by Microsoft, long before most observers were sounding it's death knell. Perhaps some entity that wishes to buy RIM can convince the board of the hopelessness of their situation and thus force an earlier sale for less than the current valuation?

Convincing the board wouldn't be enough, investors aren't going to sell to an offer that is substantially below market price, even with board approval. I guess it's possible that management could destroy value fast enough, at least as likely as them managing a turn around.
post #39 of 79
Quote:
Originally Posted by jragosta View Post

Is it possible? Sure. There could be another great visionary leader out there who just hasn't had the right opportunity. And, of course, RIM doesn't need an Apple-level turnaround to be successful. But, realistically, if RIM pulls it off, it is going to take major changes, a one in a billion leader, and LOTS of luck.

I think that's the point we need to keep in mind, it doesn't need an Apple level turnaround to survive for the medium term - a Motorola level turn around would keep it in business for a good few years. Still a long-shot, but no longer an insane long-shot.

I think a more interesting question than 'is RIM screwed?' would be 'is RIM more screwed than Nokia?'
post #40 of 79
Again???

How 'bout laying off just two!

Guess who!!!
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Ten years ago, we had Steve Jobs, Bob Hope and Johnny Cash.  Today we have no Jobs, no Hope and no Cash.

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