RIM to cut 5,000 jobs and delay BlackBerry 10 launch to Q1 2013

RIM to cut 5,000 jobs and delay BlackBerry 10 launch to Q1 2013

BlackBerry maker Research in Motion (RIM) is to delay the launch of its new phone operating system BlackBerry 10 till the first quarter of next year and will cut 5,000 jobs by the end of the fiscal year.

The news follows RIM’s latest results for the quarter to 2 June, which show revenue of $2.8bn, down 33% from $4.2bn in the previous quarter and down 43% from $4.9bn in the same time last year.

RIM also reported a net loss of $518m, compared to a net loss of $125m in its last quarter and net income of $695m in Q2 2011. RIM expects to have an operating loss in the next quarter.

Speaking to analysts in a conference call, RIM CEO Thorsten Heins (pictured) acknowledged that he delivered 'a lot of tough news'.

'This was a challenging quarter for the company on many fronts,' he said. 'And I am not satisfied with the financial performance we are reporting today.'

Referring to the 5,000 job cuts, which represents around 30% of the 15,500 strong workforce, Heins said: ‘It is necessary to change the scale and refocus the company.’

He insisted that the downsizing was critical to the company’s future. He said: ‘I fully understand the impact a workforce reduction of this size has on our employees and the communities in which we operate. I assure you that we wouldn't move forward with a change of this size if we didn't think it was critical for our future.'

Heins was also adamant that delaying the launch of the BlackBerry 10 operating system yet again was non-negotiable.

'I will not deliver a product to the market that is not ready to meet the needs of our customers,' he said. 'There will be no compromise on this issue.'

He also revealed that the company will release fewer models than in the past and that RIM will launch a BlackBerry 10 model with a physical keyboard as well as one with a touch-screen.

RIM’s results showed that it  shipped 7.8 million Blackberry smartphones in the quarter, down from 11.1 million in the last quarter and 13.2 million in the year-ago period. The company also shipped 260,000 PlayBook tablets, down from 500,000 in the previous quarter and year-ago period.

This latest delay in the launch of the BlackBerry 10 operating system is seen by analysts as adding further momentum to RIM's spiralling fortunes, allowing Apple and Android manufacturers to continue to take market share from the Canadian manufacturer.

Written by Mobile Today
Mobile Today

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