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RIM Slims as Sales Slump

Blackberry maker Research in Motion (RIM) announced that it will lay off 2000 employees and shake up its senior management after sales last quarter were slower than expected.

The layoffs at RIM amount to roughly 10% of the company’s work force, bringing the total number of employees down to 17,000. Five years ago, the company employed 5000 people, but that was before the iPhone and Android transformed smartphones from business tools into mainstream consumer products.

In its announcement, RIM emphasized a series of management moves that combined with the layoffs “are intended to create greater alignment of the organisation and to streamline RIM’s operations in order to better position the company for future growth and profitability.”

Among the personnel moves, COO Don Morrison is retiring after about 10 years with the company and Thorsten Heins is taking over the job. CIO Robin Bienfait will keep that job but also taking on responsibility for the Enterprise Business Unit. No changes to the company’s oft-criticized dual-CEO structure were announced. Jim Balsillie and Mike Lazaridis, who share the roles of CEO and chairman, will keep their posts, but the company has agreed to review its corporate structure.

RIM says its layoffs will eliminate redundancies and focus on realigning people with growth opportunities for the company. RIM says it will divulge the financial impact of the cuts come September, when it announces quarterly results.

2011 has been an awful year for RIM on a number of fronts. Fresh data from research outfit ChangeWave reflects RIM’s situation: Only 4% of 4,100-plus U.S. consumers surveyed said they preferred BlackBerry OS devices, down 1% from a March survey and down to its lowest point since ChangeWave started doing the survey in January 2008. What’s more RIM’s customer satisfaction ratings have fallen in 9 of the past 10 ChangeWave surveys.

RIM’s entry into the tablet computer market, the PlayBook, has been met with so-so reviews, the company has delayed its Bold 9900 smartphone due to a needed hardware upgrade, and in June RIM downgraded its earnings forecast for the year. The news of the layoffs and management shake-up drove the company’s stock price down before trading opened yesterday.

It’s sad to see any company let employees go, even if the move by RIM wasn’t a surprise. The company’s smartphone market share has been eroded by Apple’s iPhone and phones running Google’s Android OS, and now sits in third place in the US.

Amid RIM’s troubles, two other executives have recently jumped ship: Ryan Biden, senior product manager for the Blackberry Playbook tablet, and Brian Wallace, VP of digital marketing and media, both went to Samsung.

If there’s a silver lining, it’s that RIM needs a shake-up. A recent open letter, reportedly written by a high-level RIM employee, complained of a broken corporate culture. Among the list of grievances: Too many procedures cause slow decision-making and too many managers retain their posts after poor performance. The anonymous letter writer urged RIM to start paying more attention to the needs of consumers, rather than the demands of wireless carriers, and said the company needed to invest heavily in getting lots of great apps on its platforms.

Whether the shakeup at RIM will address those concerns is unclear, but at least it’s a change for company that desperately needs to do things differently.

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