RIM is laying off 2,000 employees, the equivalent of 10% of its workforce. The company issued a statement this morning detailing plans to reduce its workforce, as well as reorganize its top management. In the statement the company said
“The workforce reduction is believed to be a prudent and necessary step for the long term success of the company and it follows an extended period of rapid growth within the company whereby the workforce had nearly quadrupled in the last five years alone.
As part of this broad effort, RIM is reducing its global workforce across all functions by approximately 2,000 employees. RIM intends to notify impacted employees in North America and certain other countries this week. The remainder of the global workforce reductions will occur at a later date subject to local laws and regulations. All impacted employees will receive severance packages and outplacement support.”
The spin RIM is trying to make on the reduction is that expanded its staff a little too much over the last five years, and now has to cut back now that things have evened out.
RIM has been slowly losing ground to other smartphone manufacturers for several years now, and a RIM employee recently wrote a letter to top execs calling for some changes to improve the companies chance of survival in the future.
At the time RIM responded to the letter by saying
“RIM recently confirmed that it is nearing the end of a major business and technology transition. Although this transition has taken longer than anticipated, there is much excitement and optimism within the company about the new products that are lined up for the coming months. There is a fundamental business reality however that following an extended period of hyper growth (during which RIM nearly quadrupled in size over the past 5 years alone), it has become necessary for the company to streamline its operations in order to allow it to grow its business profitably while pursuing newer strategic opportunities.”
What do you think abut RIM cutting its workforce? Do you think its a one-time move, or the start of several such cuts?