TORONTO -- Research In Motion Limited (TSX:RIM) said Thursday that it is cutting 5,000 jobs as it restructures it operations and that the launch of its much anticipated BlackBerry 10 smartphone will not happen until the beginning of next year.
The launch of the new smartphones, seen as key to the recovery of the company, had been expected later this year and will now miss the important holiday shopping season.
"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,'' said chief executive Thorsten Heins in a release.
"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.''
The company announced the cuts and delays as it reported a loss of $518 million or 99 cents per share for its latest quarter. The loss compared with a profit of $695 million or $1.33 per share a year ago.
Revenue for the three months fell to $2.81 billion from $4.91 billion.
Excluding one-time items including a non-cash charge to goodwill, the company said it lost $192 million or 37 cents per share diluted.
During the quarter, RIM shipped 7.8 million BlackBerry smartphones and approximately 260,000 BlackBerry PlayBook tablets.
In its outlook, the company said it expects the next several quarters to continue to be very challenging for its business.
RIM said it expects to report an operating loss in the second quarter of fiscal 2013, as RIM continues to invest in marketing programs and continues to work through the transition to BlackBerry 10.
Market Share Eroding
RIM experienced trouble competing in the U.S. smartphone market in early 2011 and <a href="http://www.huffingtonpost.com/2011/06/03/rim-market-share_n_871129.html?ir=Canada" target="_hplink">dropped from second place to third</a>, as Google's Android and Apple's iPhone gathered steam. The company's shares decreased 40 per cent in value since February,<a href="http://www.huffingtonpost.com/2011/06/03/rim-market-share_n_871129.html?ir=Canada" target="_hplink"> Reuters reported in June</a>.
When facing leaner times in July, the struggling tech company <a href="http://www.huffingtonpost.ca/2011/07/25/rim-to-cut-2000-jobs_n_908392.html" target="_hplink">announced its plan to cut 11 per cent of its workforce</a>, or about 2,000 employees, in an attempt to scale back.
To add insult to injury, millions of BlackBerry users around the world <a href="http://www.huffingtonpost.com/2011/10/12/blackberry-outage-rim_n_1006691.html?ir=Canada" target="_hplink">experienced network outages</a>, resulting in messaging and browsing delays in October 2011. Co-CEO Mike Lazaridis <a href="http://www.huffingtonpost.ca/2011/10/13/rim-blackberry-outage_n_1008424.html" target="_hplink">posted an apology to YouTube</a> promising improvements to the system.
Following disappointing PlayBook sales resulting in <a href="http://www.huffingtonpost.ca/2011/12/02/rim-playbook-485-million-charge_n_1125380.html" target="_hplink">huge profit losses</a>, RIM <a href="http://www.huffingtonpost.com/2011/11/28/blackberry-playbook-best-buy_n_1116532.html?ir=Canada" target="_hplink">slashed its tablet prices down to $199</a>, which prompted a major pre-Christmas rush. However, customers became outraged when Best Buy, unable to keep up with demand, <a href="http://www.huffingtonpost.com/2011/11/28/blackberry-playbook-best-buy_n_1116532.html?ir=Canada" target="_hplink">reportedly cancelled existing orders and removed the PlayBook from its website</a> when it ran out of stock. In early January, RIM <a href="http://www.huffingtonpost.com/2012/01/03/blackberry-playbook-price-rim_n_1181167.html?ir=Canada" target="_hplink">put its struggling PlayBook tablet on sale</a> again in the U.S. for $299.
Mere days before RIM named Thorsten Heins as its new CEO, Samsung <a href="http://www.huffingtonpost.com/2012/01/17/samsung-rim-buyout_n_1210958.html?ir=Canada" target="_hplink">denied rumours</a> that it planned to purchase RIM or license its operating system, causing RIM shares to dip.
May was not a kind month to RIM. Soon after the<a href="http://www.huffingtonpost.ca/2012/05/28/karima-bawa-research-in-motion_n_1550984.html" target="_hplink"> departure of the company's chief legal officer</a>, Karima Bawa, the company announced that it would hiring two financial firms to advise on the company's financial performance.
If the announcement of the necessary outside help wasn't bad enough, numerous reports surfaced regarding RIM's massive layoffs during the end of May. The cuts were estimated at laying off <a href="http://www.ottawacitizen.com/business/layoffs+could+many+employees/6689699/story.html" target="_hplink">anywhere from 2000 - 6000 workers.</a>
Xitij Ritesh Patel