WATERLOO, Ont. - A day after Research in Motion Inc. (TSX:RIM) reported a more than a half billion dollar loss, those in the city where the Canadian tech giant is based were reeling from the news but admitted many had seen it coming.
"Anyone who has been living here and paying attention was expecting this," said Jeff Avery, a computer sciences masters student at the University of Waterloo, whose campus is directly across the street from RIM.
Avery said Friday that without a doubt, the news will have an impact on both the university and the region, which in the past has been dubbed "Silicone Valley North."
These days, recruiters from RIM are not as present on campus and Avery worries that this will continue to be the trend.
"They're a huge employer here," he said. "It's not good news for us."
In addition to the $518-million loss in its last quarter, the BlackBerry maker also announced that it will be cutting 5,000 jobs worldwide and not release its next model until 2013.
Student Ryan Johnston, who is a BlackBerry user, said the company still needs to continue restructure if wants to stand out against stiff competitors like Apple and phones with the Android operating platforms.
"They obviously need someone new, to come up with new ideas," he said. It's never the end of the world as long as you keep trying."
Despite the job cuts at RIM, Communitech, which represents 1,000 technology companies in the Waterloo region, says the region is more than just the BlackBerry maker.
"RIM is certainly a big player in our technology ecosystem, but by no means, is the only player," spokeswoman Avvey Peters said.
The Kitchener, Ont.-based group represents companies from two-person start-ups to giants like Google and Electronic Arts in the region.
Peters said these companies are here to stay, despite what is going on with RIM.
"They come to the region, laid down roots and grew," she said.
In Ottawa, Immigration Jason Kenney said the government is not worried about the news coming from RIM.
"Obviously, RIM is a very important Canadian company, has helped to lead our information technology sector," he said. "But we don't comment on the particular developments within a business. RIM is responsible for its own business decisions."
He said the government believes there is a labour shortage in the technology sector in this region, and expects those who lose their job will be able to find another one easily.
"In fact, we're getting complaints from employers from coast-to-coast that they're facing acute labour shortages," said Kenney. "So there are other opportunities and there are companies that are doing very well."
Xitij Ritesh Patel