Search site Search ticker symbol

Are you looking for a stock?

Try one of these

Related Videos

RIM: Stock on the rocks

A
A
 

With Research in Motion shares trading just above $11 and media reports that the firm is preparing for a major restructuring that will see it shed thousands of jobs, BNN asks Sammet Kanade, VP & Equity Research Analyst, Northern Securities, for his take on the beleaguered tech company.

___________________________________________


(Reuters) Research In Motion Ltd (RIM-T) is preparing for a major restructuring beginning in the next couple of weeks that will see it eliminate at least 2,000 jobs worldwide, the Globe and Mail reported on Saturday, citing unnamed sources.

The Canadian newspaper, citing several people close to the company, reported that the next round is layoffs is said to be planned for around June 1 - a day before the BlackBerry smartphone maker's first quarter ends - but some expect the announcement even earlier.

One source close to the company told Reuters the impending layoffs could hit as many as 6,000 people and affect RIM's legal, marketing, sales, operations, and human resources divisions.

"The strategic question is: are you accelerating into a better future or shrinking to a niche operation," said the source, who declined to be identified due to the sensitive nature of the job cuts.

A RIM spokeswoman contacted by Reuters declined to comment on the report.

But she pointed to comments that new Chief Executive Thorsten Heins and Chief Financial Officer Brian Bidulka made on RIM's last earnings call about plans to streamline operations and save $1 billion in the fiscal year.

The spokeswoman said RIM now has about 16,500 staff globally. This is down from a peak closer to 20,000.

RIM reported a fourth-quarter loss in March, when the new CEO announced the initial steps in a strategic overhaul. Heins took over from longtime co-CEOs Mike Lazaridis and Jim Balsillie in January.

Once the dominant player in the wireless e-mail sector, RIM has lost market share due to fierce competition from Apple Inc.'s (AAPL-Q) iPhone and phones running on Google Inc.'s (GOOG-Q) Android software.

RIM has already been through one round of restructuring. Last July it announced plans to cut about 11 percent of its workforce, or 2,000 jobs.

A string of high-level employees have departed RIM recently, including global head of sales Patrick Spence, who was set to take a senior job at audio company Sonos.

Several sources close to the company told Reuters RIM had been letting more junior staff go for several months in what has come to be known internally as 'Goodbye Thursdays,' because the cuts typically occurred on that day of the week.

The job cuts have failed to boost the company's stock. On Thursday RIM shares hit a multi-year low of $10.87 on the Toronto Stock Exchange. The stock changed hands for more than $150 in 2008.

CTV.ca CTV Two CTV News CTV News Channel BNN - Business News Network CP24