RIM Reshuffles Management, Plans 10% Workforce Cut

By Joseph Palenchar -- TWICE, 7/25/2011

Waterloo, Ontario - Research In Motion (RIM) will reduce its global workforce by about 10.5 percent, or 2,000 employees, and it has reshuffled top management, as part of what it called an effort to "streamline RIM's operations in order to better position the company for future growth and profitability."

The changes come as the company continues to lose smartphone market share with the rise of the Android and Apple iPhone OSs.

The workforce cuts are "focused on eliminating redundancies and reallocating resources to focus on areas that offer the highest growth opportunities and alignment with RIM's strategic objectives," the company said. The workforce reduction follows rapid growth in employee ranks, with the company's head count almost quadrupling in the past five years, the company said.

This week, RIM will inform employees in North America and select other countries about who will get the axe. The rest of the global workforce reductions will occur at a later date depending on local laws and regulations, the company said. Cut employees will get severance packages and outplacement support, the company added.

The size of the reductions is in line with a preliminary estimate factored into RIM's full-year financial guidance on June 16, the company noted, but one-time charges associated with the cost optimization program were not included in RIM's second-quarter and full-year outlook. The charges will be disclosed Sept. 15.

Though RIM is reshuffling management ranks, Jim Balsillie and Mike Lazaridis remain co-CEOs, but COO Don Morrison, on temporary medical leave, will retire from the company after more than 10 years with RIM. With Morrison's departure, product engineering COO Thorsten Heins becomes COO for product and sales, with all product engineering functions, including both hardware and software teams, consolidated under his direction. The consolidation, RIM contended, will "produce greater efficiencies and help to accelerate new product introductions in the future."
 Patrick Spence, who has overseen operations in various countries for more than 10 years, becomes managing director of global sales and regional marketing, reporting to Heins. Spence will work with Thorsten "to tightly couple the execution of product development and regional business operations around the world, enable faster local execution tailored to local market needs, and support the needs of RIM's valued operator and distribution partners," RIM said.

Jim Rowan, COO for global manufacturing and supply chain, is taking on the expanded role of operations COO and will continue to be responsible for manufacturing, global supply chain and repair services. He also adds responsibility for the organizational development and facilities management functions.
 Brian Bidulka, RIM's chief financial officer, is working together with Jim Rowan in overseeing the company's cost reduction program.

Robin Bienfait remains chief information officer but adds responsibility for the enterprise business unit. David Yach becomes software chief technology officer.