BlackBerry maker Research In Motion (RIM) has announced it aims to reduce operating costs by one billion dollars per year, a plan that includes significant layoffs.
RIM’s U.S. sales declined dramatically due to the fierce competition represented by the Apple's iPhone and Google’s Android OS, which is why RIM will terminate the contract with Celestica – phone parts manufacturer.
Celestica is a Canadian company that provides parts and assembles terminals for several companies, including RIM. The company recently announced that it will stop producing parts for the BlackBerry manufacturer and for this reason it expects a loss of $35 billion.
BlackBerry, along with Nokia, are the companies that have lost the battle against Apple. RIM recorded losses of $125 million in the first quarter of the year, while in Q1 2011 had a profit of $1 billion. Revenues decreased from $ 5.2 billion to about $4.2 billion and shares value decreased by 80% in one year. In comparison, Apple has announced for 2011 a net profit of $ 13.06 billion, mainly supported by the sales of iPhones and iPads, revenues reaching a record of $46.33 billion.
RIM also fired 35% of its employees last year, thinking that this would be the right solution, but unfortunately the collapse continued.
Besides Celestica, RIM will also terminate the contracts with other two companies, Flextonics International Ltd and Jabil Circuit Inc.
“RIM has committed to achieve significant efficiencies and reducing operating costs during this fiscal year. Reducing the number of employees is part of this initiative,” said the company spokesman, Tenille Kennedy.
RIM's reorganization process could affect between 2,000 and 3,000 jobs, as estimated by analysts at Northern Securities Toronto, under the premise that 30% of the announced cost reductions will be achieved by measures of employment and human resources. Also, Wall Street Journal, citing sources close to the company, claims that RIM fires for weeks groups of at least 10 employees.
Canadian company plans to launch this year a new range of smartphones based on the BlackBerry 10 OS, through which hopes to regain market share.
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