RIM axes staff, cuts spending
But will it make Feb. breakeven goal?
Research In Motion Ltd, one of the pioneers of the PDA market with its Blackberry devices, plans to axe some 200 staff, and decrease discretionary spending, in an effort to reach its breakeven target date of February 2003.
The staff reductions will bring its total workforce down to 2,000 employees, and will result in a special pre-tax charge of $8m to $9m in the third quarter of 2003. The long-term cost saving of these measures is estimated to be approximately $20m to $25m annually.
In a statement, chairman and co-CEO Jim Balsillie said: "In order to solidify our position and achieve financial targets, we are moving ahead with a difficult yet strategically important decision to tighten operational efficiencies, and adjust our current staffing level."
Only last week, the Waterloo, Canada-based company signed potentially lucrative licensing deals with some of the world's most prominent names in the mobile computing market, namely Nokia, Palm and Handspring.
The market remains skeptical that RIM will hit its February breakeven target, due to current market conditions and an increasing number of competitors, and analysts are predicting that it will continue to lose money through to March 2004.