News from Canada’s Globe and Mail published on Saturday indicates the Waterloo, Ontario-based firm is to take the difficult step of laying off at least 2,000 of its 16,500 workforce in a global restructuring effort set to start in the next few weeks. The Globe and Mail cites as its source several people close to the company, adding that the lay-offs could “sweep across departments, ranging from senior positions in RIM’s legal division to human resources, finance, sales and marketing.” The depressing news comes in the same week that the company’s global sales chief, Patrick Spence, resigned after 14 years at the firm.
The reported changes are set to come a few months after RIM founder Mike Lazaridis, together with his right-hand man Jim Balsillie, stepped down from running the firm in the midst of a difficult period which saw its once hugely popular BlackBerry devices losing market share to the iPhone and Android-powered devices. And that wasn’t the half of it.
RIM’s attempt to make an impact in the tablet market last year with the launch of its PlayBook device came to nothing, while in October users of BlackBerry devices had to put up with a four-day service blackout that culminated in Lazaridis making a personal video apology. On top of those PR disasters, RIM announced at the end of last year that it had taken the decision to delay the launch of its much-anticipated BlackBerry 10 operating system – an OS which must succeed if the company is to haul itself out of the doldrums.
More grim reading for executives came this week when the International Data Corporation (IDC) published statistics showing that BlackBerry’s share of the smartphone market has fallen from 13.6 percent a year ago to a worrying 6.4 percent today.
Following Lazaridis and Balsillie’s departure, RIM’s then chief operating officer Thorsten Heins was installed as CEO. In March, Heins spoke of the need for “substantial change” at the mobile firm, with the reported imminent lay-offs no doubt coming as part of his in-depth review of company strategy.
Speaking to Bloomberg recently about the firm’s future, Paul Taylor, a fund manager at BMO Harris Private Banking in Toronto, said, “The challenge for Mr. Heins is to take that iconic brand and products that are reasonably competitive and ensure that they do get appropriate attention from the average consumer.”
He added, “That’s the challenge: to reverse the negative sentiment that has developed.”
It appears Heins and his team will be embarking on that challenge with a much reduced workforce.