Research in Motion to Cut 5,000 Jobs As Financial Losses Deepen
Research in Motion has announced that it is cutting another 5,000 jobs as the company's revenue slumped and it plunged into a deep financial loss. The job losses represent around a third of the company's workforce.
For the three months ended June 2, 2012, the company saw its revenues drop by
a third (33%) to US$2.8 billion compared to US$4.9 billion a year ago. The revenue breakdown for the
quarter was approximately 59% for hardware, 36% for service and 5% for software and other revenue.
The company also posted a net loss of US$518 million, compared to a profit of US$695 million a year ago.
The firm has also delayed the launch of its BlackBerry 10 platform until next year due to problems that it said were associated with integrating new features into the smartphones.
Thorsten Heins, President and CEO commented: "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. In parallel with the roll out of BlackBerry 10, we are aggressively working with our advisors on our strategic review and are actively evaluating ways to better leverage our assets and build on our strengths, including our growing BlackBerry subscriber base of approximately 78 million, our large enterprise installed base, our unique network architecture and our industry leading security capabilities."
The company is also taking a actions to lower its costs, and will spend US$350 million this year on closing several factories and the costs associated with 5,000 redundancies.
RIM expects to report a financial loss in the next quarter as well, but did not provide a further outlook.