RIM to cull staff in face of Android, Apple assault

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RIM to cull staff in face of Android, Apple assault

Alex Scroxton

RIM is to embark on a drastic cost-cutting drive that will see undisclosed numbers of redundancies across the firm, and the "reallocation of resources to areas that offer highest growth opportunities" after turning in a poor performance in the first quarter of its fiscal 2012.

The firm posted sales of $4.9bn (£3bn), down 12 per cent on the prior quarter and up 16 per cent year-on-year.

Approximately 78 per cent of sales came from hardware sales, 20 per cent from services and 2 per cent from software and other revenue. RIM said it shipped 13.2 million BlackBerries in the three months to 28 May, and 500,000 PlayBook tablets.

However, operating profit tumbled 15 per cent year-on-year, and net income of $695m was down nine per cent on the year-ago quarter, missing analyst targets, as it came under increasing pressure from both Apple's iPhone and the growing stable of Android devices.

Speaking on the firm's quarterly conference call, co-CEO Jim Balsillie admitted the firm had had a challenging quarter, not helped by an aging product portfolio and a market slowdown.

Meanwhile his colleague Mike Lazaridis emphatically denied that the impending shake-up was a restructuring plan.

"I wouldn't call this restructuring because when we look at restructuring , it means you are fundamentally lopping things off," Lazaridis said.

"That's not this at all, but do we expect people to re-examine what they're spending on in the zero-based play? Absolutely, because we want to ... deliver profitability within our business model and ... make sure we have the resources and capabilities to invest in those things we want to grow."

This is the second quarter in succession that RIM has booked sub par numbers, leading to speculation that the firm may soon face similar difficulties to one-time market golden boy Nokia.

 

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