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June 20, 2012

BlackBerry Maker RIM Cuts Jobs to Trim $1B in Operating Expenses

By Ashok Bindra, TMCnet Contributor

Bloomberg (News - Alert) Businessweek reported that the struggling Waterloo, Ontario-based BlackBerry maker Research In Motion (RIM) plans to cut jobs as part of a cost saving effort to trim $1 billion in operating expenses.



In an e-mail to Businessweek reporter Nick Turner, company spokeswoman Tenille Kennedy wrote that “RIM has committed to achieving significant efficiencies and operating cost reductions over the course of this fiscal year. Headcount reductions are part of this initiative.”

The Businessweek report said RIM aims to save the $1 billion in operating costs annually by cutting the number of manufacturing sites. To that end, the company is also reviewing its organizational efficiency.

In addition, as part of an effort to streamline supply chain, electronics supplier Celestica (News - Alert), Inc. will stop manufacturing BlackBerry.

Sameet Kanade, an analyst at Northern Securities, Inc. in Toronto, told Businessweek that the current strategy may lead to job cuts between 2,000 to 3,000, assuming RIM tries to eliminate 30 percent of the targeted operating expenses through labor reductions. This latest reduction in the workforce follows a round of 2,000 cuts announced about a year ago.

According to Turner, CEO Thorsten Heins is working to renew faith in the company after a stock decline of about 60 percent in the past 12 months. Meanwhile, RIM plans to introduce a new lineup of phones based on the BlackBerry 10 operating system this year. “It is an attempt to regain market share from Apple, Inc.’s iPhone (News - Alert) and devices running Google Inc.’s Android,” he wrote.

Another major cell phone manufacturer trying to turn around its operations by cutting jobs is Nokia (News - Alert) Oyj. The Finnish company recently announced plans to eliminate as many as 10,000 positions worldwide, along with shutting down a few production and research sites.


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Edited by Braden Becker
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