RIM to cut 2,000 jobs as iPhone market share grows

Research In Motion Ltd., maker of the BlackBerry smart phone, plans to cut 2,000 jobs, or about a tenth of its workforce, as sales slow amid market share losses to Apple's iPhone.

The reductions, across all functions, are part of a plan to "focus on areas that offer the highest growth opportunities," RIM said Monday. The job cuts will leave the Canadian company with about 17,000 employees.

RIM predicted last month that sales this quarter may drop for the first time in nine years. The company is losing market share in the United States to the iPhone and handsets running Google's Android software, in part because it hasn't introduced a major new BlackBerry model since August. Cheaper Google phones are also making inroads in Latin America, Asia and Europe, threatening the popularity of less expensive BlackBerry models like the Curve.

Monday's announcement "takes care of the expenses and they still need to focus on the revenue side," said Alkesh Shah, an analyst at Evercore Partners Inc. in New York. "They need to find a way to make consumers get excited about RIM products. At this point they haven't gotten there."

While RIM had said June 16 it would cut jobs, the figure of 2,000 "is more significant than previously suggested" by co-CEO Jim Balsillie, said Mike Abramsky, an analyst at RBC Capital Markets in Toronto, who rates RIM "sector perform."

When asked about the restructuring plan by one analyst on a June 16 conference call, Balsillie had said: "I would not call it a restructuring and I think that's just radically mischaracterizing it."

The company said Monday any charges associated with the job cuts including severance packages aren't included in its forecasts for the current quarter and fiscal year. RIM will give details on the financial implications of the job cuts when it reports fiscal second-quarter results Sept. 15.

RIM, whose management structure has come under increasing scrutiny from investors, also said it reassigned some senior managers' responsibilities and titles.

Chief Operating Officer Don Morrison, currently on medical leave, plans to retire and Jim Rowan has taken on the expanded role of COO for operations, RIM said Monday. The company named Thorsten Heins to the enlarged position of COO for product and sales, overseeing product engineering, hardware and software.

The promotion of Heins, a former Siemens AG manager who joined RIM in 2007, and a move to bring hardware and software under the leadership of one executive should accelerate product development, said Shah, who has an "equal weight" rating on RIM.

"Thorsten, with his Siemens background, is known as somebody who is exceptionally operationally efficient," Shah said. "That's a positive for the upcoming margin pressure that is likely."

RIM also appointed Patrick Spence as managing director of global sales and regional marketing. Chief Information Officer Robin Bienfait will also oversee the enterprise business.