BlackBerry to make 5,000 job cuts and delays phone launch

BlackBerry: announces job cuts
BlackBerry: announces job cuts

BlackBerry maker Research in Motion (RIM) is to axe 5,000 jobs from its global workforce as it reveals a further delay of the launch of its next generation of smartphones.

The swingeing jobs cuts which are expected to run across the business represent 30% of RIM's 16,500 strong workforce.

To add to its woes,  RIM has reported that the already much delayed BlackBerry 10 smartphone launch is now scheduled for Q1 of 2013.

RIM said the launch plans for the Blackberry 10 had "proven to be more time consuming than anticipated."

In a bid to make $1bn (£0.6bn) in cost savings the company will make 5,000 job cuts by the end of the fiscal year, which is much worse than the 2,000 job cuts expected from previous reports.

The job cuts were announced in the company's financial results, which revealed that revenues at the company has plunged by 43% year-on-year in the quarter ending 2 June with revenues falling from $4.9bn (£3.1bn) to $2.8bn (£1.8bn).

The company expects to make an operating loss in the next quarter as a result of continuing to aggressively market its BlackBerry 7 devices, as it awaits the delayed launch of the BlackBerry 10 operating system.

RIM's fortunes have been hit by consumers abandoning BlackBerrys for iPhones and Android phones.

RIM’s marketing operation is one of the key focuses of the company’s Cost Optimization and Resource Efficiency (CORE) programme.

The smartphone maker is aiming to "more effectively leverage marketing windows and prioritise our marketing efforts and spend in regions that offer the highest opportunity and return".

Thorsten Heins, president and chief executive at RIM, said: "I am not satisfied with these results and  continue to work aggressively with all areas of the organization and the board to implement meaningful changes to address the challenges, including a thoughtful realignment of resources and honing focus within the company on areas that have the greatest opportunities.

"Our top priority going forward is the successful launch of our first BlackBerry 10 device, which we now anticipate will occur in the first quarter of calendar 2013.

"In parallel with the roll out of BlackBerry 10, we are aggressively working with our advisors on our strategic review and are actively evaluating ways to better leverage our assets and build on our strengths."

RIM has brought in investment banks JPMorgan Chase and RBC Capital Markets to lead its strategic review.

The company is even considering abandoning its own operating system and adopting Microsoft’s upcoming Windows 8 operating system, sources have told Reuters.

Microsoft chief executive Steve Ballmer had approached RIM in recent months in an attempt to sign a partnership similar to the one it has with Nokia, according to the report.  

Follow Matthew Chapman at @mattchapmanUK

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