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Struggling BlackBerry maker RIM to begin layoffs of 2,000 employees

EXECUTIVE DEPARTURE Research In Motion said that operating chief Don Morrison, who went on medical leave last month, will retire. EXECUTIVE DEPARTURE
Research In Motion said that operating chief Don Morrison, who went on medical leave last month, will retire.
By Ian Austen
New York Times / July 26, 2011

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NEW YORK - As it struggles with the declining popularity of the BlackBerry line of smartphones, Research In Motion said yesterday that it would begin laying off about 2,000 employees, or 10.5 percent of its workforce, this week.

RIM also disclosed changes in the duties of several executives. While those new arrangements did not appear to be significant, it also said that Don Morrison, the chief operating officer, will retire.

Morrison, who joined RIM in 2000, went on medical leave last month.

The growing popularity of Apple iPhones and phones running Google’s Android operating system in RIM’s crucial North American market have forced the company’s share price down by about half over the past year.

RIM’s outlook now largely rests with a line of BlackBerry phones based around an entirely new operating system known as QNX.

Those phones, however, will not be for sale until an unspecified point next year. In the interim, RIM has introduced phones with an improved version of its decade-old operating system.

The company’s move into the tablet computer market with the BlackBerry PlayBook this spring has also proved disappointing. The device, which uses the new operating system, was introduced without many major features, including e-mail software, a puzzling omission given that BlackBerry phones were the world’s first successful wireless e-mail devices.

RIM has shipped only 500,000 PlayBooks, while Apple said last week that it sold 9.25 million iPad2s during its most recent quarter.

RIM said that severance payments and other costs related to the layoffs are not included in its financial outlook for the current quarter.

While the company offered no figures yesterday, Mike Abramsky, an analyst with RBC Capital Markets, estimated that the pretax cost will be between $200 million and $250 million.

RIM said the layoffs in North America would take place this week. Overseas layoffs will follow. The majority of its workforce is in Waterloo, Ontario, where RIM is headquartered.