RIM Slims as Sales Slump
Blackberry maker Research in Motion announced that it will lay off 2000 employees and shake up its senior management after sales last quarter were slower than expected.
The layoffs at RIM amount to roughly 10 percent of the company's work force, bringing the total number of employees down to 17,000. Five years ago, the company employed 5000 people, but that was before the iPhone and Android transformed smartphones from business tools into mainstream consumer products.
In addition to the layoffs, Don Morrison, RIM's chief operating officer, will retire, and his role will be filled by other senior executives. Jim Balsillie and Mike Lazaridis, who share the roles of CEO and chairman, will keep their posts, but the company has agreed to review its corporate structure.
Video: RIM Downsizes Staff, Readies New BlackBerry Phones
It's sad to see any company let employees go, even if the move by RIM wasn't a surprise. The company's smartphone market share has been eroded by Apple's iPhone and phones running Google's Android operating system, and now sits in third place in the United States. Amid RIM's troubles, two other executives have recently jumped ship: Ryan Biden, senior product manager for the Blackberry Playbook tablet, and Brian Wallace, vice president of digital marketing and media, both went to Samsung.
If there's a silver lining, it's that RIM needs a shake-up. A recent open letter, reportedly written by a high-level RIM employee, complained of a broken corporate culture. Among the list of grievances: Too many procedures cause slow decision-making and too many managers retain their posts after poor performance. The anonymous letter writer urged RIM to start paying more attention to the needs of consumers, rather than the demands of wireless carriers, and said the company needed to invest heavily in getting lots of great apps on its platforms.
Whether the shakeup at RIM will address those concerns is unclear, but at least it's a change for company that desperately needs to do things differently.