RIM's 'mass exodus' finally hits: "It's not me, it's you"

RIM's 'mass exodus' finally hits: "It's not me, it's you"

Summary: A RIM 'mass exodus': we knew it would happen, and we thought that customers would walk away in droves. Instead, it's the staff who are walking out amid job cuts as high as 6,000.

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TOPICS: BlackBerry
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We knew there would be a mass exodus from BlackBerry maker Research in Motion at some point. Most thought it would happen from the customer side. Instead, RIM is losing key people from within the company walls.

Karima Bawa, RIM's chief legal officer, is to retire in the coming weeks. It follows the departure of U.K.-based Patrick Spence, managing director of sales --- one of the more public-facing executives of the company --- who left RIM after 14 years earlier this month.

Two senior RIM executives aside, the loss of up to 6,000 jobs --- though the figure is likely to be considerably less --- is a significant blow to the company, even if it's something RIM can first control and secondly execute at its own pace.

Northern Securities analyst Sameet Kanade predicted RIM would see a "mass exodus of corporate and enterprise customers" after two U.S. government departments jumped ship in favour of Android devices and iPhones. RIM's market share was forecast as dropping considerably lower and faster than first expected as a result because the smartphone maker had moved "too slowly" to counter the ever-changing smartphone market.

But it's not its customers RIM needs to worry about. It seems the mass exodus has come from within.

Since the departure of co-chief executives Mike Lazaridis and Jim Balsillie in January, the company has failed to show signs of moving towards a state of recovery.

RIM is holding on to anyone related to BlackBerry 10, the company's forthcoming operating system designed for its next generation smartphones. Since the departure of his former bosses, current chief executive Thorsten Heins is hedging his bets on BlackBerry 10 to the point where if you're not "in it to win it," you can leave the company.

But signs of recovery for the Ontario-based company look bleak.

Analyst firm Asymco explains in a helpful graph the "consequences of failure to profit" from the smartphone market, that pinpoints where mobile phone makers have hit a decline --- and will likely never recover.

"Nokia, LG and RIM [have] joined the 'endangered species list'. If the pattern repeats, then RIM and Nokia are in early phases of what promises to be an extended period of pain followed by an exit," analyst Horace Dediu explains.

RIM has a problem. If Asymco is right and RIM cannot recover from the depths it found itself in, BlackBerry 10 is not going to bring the company back to its once-proud status.

By cutting jobs in all departments bar those associated with BlackBerry 10, the company runs the risk of alienating the other areas of the business that may be palatable for sale in the future; that is if RIM ever starts to look for an end-game solution.

Image credit: CNET AsiaAsymco.

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Topic: BlackBerry

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4 comments
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  • How come if company A has layoffs it's looked upon as a

    good and healthy thing? However if company B has layoffs it's looked upon as a sign of the end? Is there a double standard here?

    Pagan jim
    James Quinn
    • Because throwing baggage ...

      ... out of an airplane while it's in a tail spin will likely not avert a crash; however, throwing baggage out of an airplane while it is basically flying along, though struggling to fly, likely will.

      Blackberry needs to take drastic action now, and introducing the Blackberry 10 is too little, too late. Short of a company buying Blackberry now, I see no hope for it - save the company selling off its assets, ASAP.
      P. Douglas
      • They once said the same thing about Apple...

        I'm certain the same has been said about other companies in the past as well. Companies that are still here today and doing well. The fat lady has yet to sing nor am I certain she is even warming up. Is RIM profitable? By that I mean taking in more than it is spending? I don't mean based on stock shares or stack value but rather is it taking in more than it is spending? Will it be if it is not after the layoff? The basis for a lot of such doom and gloom is often based on silly numbers like "Hey they did not make MORE profit than last quarter that means they are in trouble!!!" No the fact that they continue to make a profit is bad cause it's not MORE profit than the last quarter...SILLY!!! As far as I'm concerned any company that makes money rather than looses it is in relatively good shape regardless of market share or stock price at least for a time.

        Pagan jim
        James Quinn
      • Drastic?

        Unsure what else drastic wise RIM needs to do at this point?

        - both CEO's stepped down (one parted ways)
        - migrated to new OS platform to provide better features over 10 year old JAVA based OS
        - multiple acquisitions to fill gaps (NewBay, DocstoGO, Tungle etc)
        - Dumping executives who are not meeting benchmarks
        - Dumping employees where not needed (JAVA related, overlap due to acquisitions)
        - Doing anything possible to support developers

        RIM is damned if they rush BB10 (see Playbook) damned if they take the time to make sure it's solid (market wants it now).
        MobileAdmin