It seems that RIM’s bad days are not going to be ended. Another jolt for the shareholders and investors, when the company announced to lay off 5,000 jobs on Thursday. The main issue is here with the delay of forthcoming BlackBerry 10 phone. RIM has explained that the delay (in the launch of the device) has endangered the company to survive in the market.
At present, the company’s business is crumbling even faster than the thoughts. However, RIM has saddled its afford to launch the device soon, but the situations are depicting something else. I think, it’s not possible for the company to launch the device till the end of this year due to give up of the device by North Americans for iPhones and Android-powered Smartphones. Comparatively, BlackBerry models look obsolete than Apple’s iPhone and Samsung Galaxy SIII.
RIM’s CEO–Thorsten Heins–said on a conference call with analysts, “I will not deliver a product to the market that is not ready to meet the needs of our customers. There will be no compromise on this issue. It is necessary to change the scale and refocus the company. I fully understand the impact a workforce reduction of this size has on our employees and the communities in which we operate. I assure you that we wouldn’t move forward with a change of this size if we didn’t think it was critical for our future.”
After announcement of job layoffs on Thursday, RIM’s market share plunged $1.27 or 14% , to $7.86 in extending trading. It’s expected that if company continues trading today, then it might reach to its nine- years’ low level.
On Thursday, RIM also reported a lost of $518 million, or 99% share, in its fiscal Q1 ending June 2 of this year. On the contrary, the company’s total profit in the last year was $695 million, or $1.33 per share.
Actually, RIM layoffs 5,000 job in order to save $1 billion this year. At this time, the company is methodically endeavoring to work through the a review of the business (as a part of its effort) by reducing some positions. It has been reported that the company could layoff 6,000 people related to older software and manufacturing platform. After cutting 2,000 jobs in the last summer, RIM had 16,500 employees till the end of the prior month.
At present, the condition of Nokia and RIM is almost same, both are preparing to fight their last battle. I have already described if Nokia fails to entice users through its Windows 8 based 10-inch Tablet, then, the company will have to seek for potential mergers. The situation is almost same for RIM, the company has stacked its all on forthcoming BlackBerry 10 phone.
A few days back, RIM announced to split its hardware and networking divisions apart. There’s also a probability that it could sell its hardware business to other potential player like Amazon and Facebook. But, for the survival of the company, it needs to have hardware division. By the way, without hardware, envisaging to launch BlackBerry 10 OS is infatuation. However, the company hired a financial firm (J.P. Morgan) to identify flaws, but, the effort seems fruitless this time.