Blackberry maker Research in Motion (News 
- Alert) continued its cost-cutting initiative on Monday by unveiling plans to lay off approximately 2,000 employees, or more than 10 percent of its workforce.
The move comes just a month after the Canadian company reported weak earnings for the quarter ending in May and issued a dismal outlook for the rest of the year. RIM saw its net profits fall to $695 million in the quarter, down from $769 million a year ago. The company also experienced a 12 percent dip in revenue during the same period.
The news caused RIM shares to drop 2.7 percent to $27.15 in early market trading, according to Bloomberg. The Blackberry maker's stock has plummeted more than 50 percent since the beginning of the year due to the beating that it is taking from Apple and Google (News - Alert) in the consumer smartphone race.
In addition, RIM's first generation tablet device, the Playbook, has received less interest than the company had hoped. Mediocre sales numbers caused the company to lower its expectations for the current quarter by more than 1 million units.
RIM said that the layoffs will help eliminate redundancies and reallocate resources to more profitable areas. The workforce reductions will affect employees in North American and other select countries and will not be exclusive to any particular division.
The financial impact of the layoffs won't be recognized until Sept. 15, when RIM reports its second fiscal quarter results. The cuts will drop RIM's global workforce to around 17,000 employees.
The layoffs will coincide with a senior management shakeup that will create two chief operating officers, each will different responsibilities. Thorsten Heins will take on the role of COO for product and sales, while Jim Rowan will oversee the organizational development and facilities management functions as the COO of operations.
The two men will replace current COO Don Morrison, who is on medical leave and has announced plans to retire.
Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. ITEXPO (News - Alert) offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. To register, click here.
Beecher Tuttle is a TMCnet contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.
Edited by Jennifer Russell
