RIM Reportedly Cuts Jobs to Cut Costs
NEW YORK (TheStreet) -- Research in Motion(RIMM) is shedding jobs as part of its cost optimization and resource efficiency program, an initiative to cut operating expenses by $1 billion by the end of fiscal 2013.
In a business update at the end of May, President and CEO, Thorsten Heins, said first-quarter results would reflect "lower volumes and highly competitive pricing dynamics in the marketplace." He announced several spending reductions and a few changes in senior management. RIM's stock has fallen 8.34% since and nearly 30% in 2012.
The struggling BlackBerry-maker has been laying off at least 10 employees at a time, over the past several weeks, according to a Wall Street Journal report.
"RIM has committed to achieving significant efficiencies and operating cost reductions over the course of this fiscal year," said Research In Motion spokeswoman, Tenille Kennedy, according to Bloomberg. "Headcount reductions are part of this initiative."
The Canadian-based company cut 2,000 jobs about a year ago.
Citi analyst, Jim Suva, reiterated his sell rating and target price of $9.50 on Wednesday, citing major issues that still remain at the Waterloo, Ontario-based technology company.
"We still believe major issues still face the company. We do not believe RIMM is an acquisition target or the company is looking to break itself up for sale. Microsoft is working closely with Nokia and the Android ecosystem now has the Motorola patents following the closing of the acquisition of Motorola Mobility by Google," wrote Suva in a note to clients.
He added that he believes RIM "will fight to try to develop & launch more compelling product offerings."
RIM releases financial results for the first quarter, which ended on June 2, on June 28. Analysts polled by Thomson Reuters expect Research In Motion to earn 1 cent per share on $3.149 billion in revenue.
RIM shares have fallen 4.33% on Wednesday, last changing hands at $10.28.
--Written by Nathalie Pierrepont in New York.
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