The Korea Herald


BlackBerry maker to cut 2,000 jobs

By 이현주

Published : July 26, 2011 - 19:21

    • Link copied

NEW YORK (AP) ― Faced with tough competition and falling profits, BlackBerry maker Research In Motion Ltd. is cutting 2,000 jobs as part of a cost savings plan announced last month and is shuffling some senior executives.

The job cuts amount to about 10 percent of the company’s work force. The company said Monday it will notify affected employees this week. It expects to give more information on the layoffs when it reports fiscal second-quarter results on Sept. 15.
Michael Lazaridis addresses the audience at the BlackBerry World conference in Orlando. (Bloomberg) Michael Lazaridis addresses the audience at the BlackBerry World conference in Orlando. (Bloomberg)

Its U.S. shares fell $1.24, or 4.4 percent, to $26.67. The shares are close to their five-year low of $25.60, hit Wednesday.

Although BlackBerrys have dominated the corporate smartphone market, their popularity in the consumer market has been short-lived. While RIM’s sale are still growing thanks to BlackBerry adoption overseas, U.S. consumers have moved on to phones with big touchscreens like Apple Inc.’s iPhone and various models that run Google Inc.’s Android operating system are dominating that market.

Last week, Apple reported selling 20.3 million iPhones in the April to June period, a record number. RIM sold 13.2 million BlackBerrys in the March to May period.

RIM has been slow to adapt to the changing winds in the phone market. Last month, co-CEO Mike Lazaridis said the company was already far along in developing its next-generation BlackBerrys when it realized that U.S. customers wanted higher performance, requiring the company to upgrade the chips used. That posed an engineering challenge and delayed products, he said.

The launch of its PlayBook tablet computer, meanwhile, wasn’t as successful as the company had hoped, and phone companies have shown little interest in pushing it.

RIM reported a 10 percent drop in its fiscal first-quarter earnings in June and gave an outlook for the year that was well below what analysts had expected. Co-CEO Jim Balsillie said then that the planned cost cuts were a “streamlining,” prompted by the rapid growth of the company and more than a dozen acquisitions.

Also Monday, RIM said it is naming two executives to take on different parts of the chief operating officer role. COO Don Morrison went on medical leave in June.

Thorsten Heins is being named chief operating officer, product and sales. Jim Rowan will become COO, operations. Morrison is retiring after more than 10 years with the company.