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BlackBerry maker Research in Motion announced this morning that it is laying off 2,000 employees as part of an earlier announced “cost optimization” program.
Additionally, the company is rearranging the roles for some of its senior management. Co-CEOs Mike Lazaridis and Jim Balsillie, who have been criticized for failing to keep the company competitive against fresh mobile upstarts like the iPhone and Android, are holding onto their positions.
“It’s common for companies, once they run into a glitch, to look at the organization and determine what functions are duplicated or no longer strategic,” Jack Gold, the founder and principal analyst at J. Gold Associates, told VentureBeat. “It should let them run a leaner ship and hopefully allow them to get products to market quicker with fewer groups and layers of management to get in the way.”
The layoffs, which account for 10 percent of the company’s global workforce, don’t come as a huge surprise. RIM announced in June — during its (somewhat disastrous) first quarter earnings call — that it would be implementing a program to cut down on costs. Following the job cuts, RIM will have a workforce of some 17,000 employees.
“The workforce reduction is believed to be a prudent and necessary step for the long-term success of the company and it follows an extended period of rapid growth within the company whereby the workforce had nearly quadrupled in the last five years alone,” RIM wrote in a release today.
The executive changes are also meant to streamline RIM’s operations. Thorsten Heins will be taking over as COO of product and sales, where he will manage both hardware and software product engineering. Patrick Spence, who formerly headed up sales and regional operations in North America, Asia Pacific, and elsewhere, has been tapped as managing director of global sales and regional marketing.
Existing CIO Robin Bienfait will continue her duties but will also take over the Enterprise Business Unit. David Yach will now serve as CTO of software, and Jim Rowan is on board as COO of operations. The cost optimization project is being led by Brian Bidulka, RIM’s CFO, and Jim Rowan.
While the changes seem necessary, I don’t think RIM’s bigger problems — which include the lack of a clear plan to fight back against the iPhone and Android, as well as confusion over why people are criticizing it — will be solved until the company appoints some new blood in the CEO spot. In its last earnings call, both Balsillie and Lazaridis seemed hilariously out of touch with the real world: they praised each others’ performance and argued that the BlackBerry PlayBook tablet was a major accomplishment that took place under their leadership. Meanwhile, the company’s stock has been falling precipitously (it started the year around $64 per share; now it sits at around $27).
But while I, and many others, think the RIM CEOs have to go, Gold disagrees: “It’s usually not the CEO that causes issues in execution. It’s usually the middle layer of an organization that has the potential to get in the way of progress. By streamlining the organization, I think it’s easier for a direction to be set, agreed upon and executed.”