The M&A rumor mill may have temporarily shifted its attention from RIM to Nokia, but the former is still battling its own declines in stock price and market share. Its latest reorganization aims to cut $1bn in operating costs, and job losses have already begun, though the BlackBerry maker is not revealing numbers, at least until its update at the end of June.
As at Nokia, which announced its own payroll reduction last week, RIM’s share price continued to fall, despite the kind of statements which usually please the markets. ‘RIM has committed to achieving significant efficiencies and operating cost reductions over the course of this fiscal year,’ a spokeswoman told Bloomberg. ‘Headcount reductions are part of this initiative.’ But the stock fell by 5% on Wednesday (they are down by 27% in 2012 so far and about 60% in the past 12 months).
Analysts predict that RIM will axe between 2,000 and 3,000 posts, in addition to the 2,000 lost last year. The lower figure would be 12% of its workforce. This would equate to about 30% of the targeted savings, with the rest made up largely by closing manufacturing sites and ‘reviewing organizational efficiency’ across the company, as the firm put it. Contract supplier Celestica announced this week that it will stop manufacturing the BlackBerry as part of RIM’s bid to rationalize its supply chain.
According to The Wall Street Journal, RIM has been laying off ‘small batches’ of around 10 employees for several weeks.