© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
Last updated: July 25, 2011 11:11 pm
The company also announced several senior management changes, including the retirement of its chief operating officer, Don Morrison. Mr Morrison has been on temporary leave recuperating from an undisclosed illness.
The BlackBerry maker is struggling to maintain its edge against Apple’s iPhone and handsets using Google’s Android operating system, among others. RIM shares have lost more than half their value in the past six months. Its market value has shrivelled from a peak of $77bn in mid-2008 to $14.5bn. The stock lost 4.8 per cent to close at C$25.19 in Toronto on Monday.
RIM described the lay-offs on Monday as “a prudent and necessary step for the long term success of the company”, following an extended period of rapid growth. It noted that the workforce, currently some 19,000, had almost quadrupled in the past five years. The company said when it reported fiscal first-quarter results last month that it would cut jobs to stay competitive, but it gave no details at the time. The job cuts bring RIM’s headcount to about 17,000 people.
Close to half of RIM’s employees are based in Waterloo, Ontario, south-west of Toronto, where the company is headquartered.
The statement added that resources would be reallocated “to focus on areas that offer the highest growth opportunities and alignment with RIM’s strategic objectives”.
RIM said it would disclose further information on the financial impact of the belt-tightening measures when it releases second-quarter results on September 15.
Monday’s announcement does not address recent criticism relating to RIM’s corporate governance, in particular the roles of its two joint chairmen and chief executives, Jim Balsillie and Mike Lazaridis.
Institutional shareholders, led by Northwest & Electric Investments, agreed last month to withdraw a proposal that could have forced RIM to separate the roles of chairman and chief executive.
In return, RIM agreed to set up a committee of independent directors to study the merits of appointing a “lead director” on the board, and the business necessity for the company’s co-chief executives to hold “significant” board-level titles. The committee is due to report by January 31 2012.
Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in