Layoffs to Begin This Week at RIM, Maker of BlackBerry

Research in Motion will begin laying off 10% of its workforce this week. This comes as no surprise to people watching the company: the BlackBerry has been losing smartphone market share and has dropped to second place after Google's Android. Also, RIM warned of lower revenues and announced layoffs (their "cost optimization program") last month.

Skeptics doubt that the layoffs will be an effective long-term solution for RIM:

RIM layoffs
Video source.

In a press release dated July 25, 2011, this is how the company explained the decision:

Cost Optimization Program
In addition to the management changes outlined above, RIM today provided further details on its cost optimization program, which is 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 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.

As part of this broad effort, RIM is reducing its global workforce across all functions by approximately 2,000 employees. RIM intends to notify impacted employees in North America and certain other countries this week. The remainder of the global workforce reductions will occur at a later date subject to local laws and regulations.  All impacted employees will receive severance packages and outplacement support. 

The size of this workforce reduction is in line with the preliminary estimate that was factored into RIM's full year financial guidance on June 16, 2011.  Following the completion of the workforce reduction, RIM's global workforce is expected to be approximately 17,000 people.  Additional information about the financial impact of this workforce reduction and other operating expense reductions will be communicated when the company reports Q2 results on September 15, 2011. As explained on June 16, 2011, any one-time charges associated with the cost optimization program are not included in RIM's Q2 and full year outlook, but will be identified and disclosed on September 15, 2011.

Discussion Starter and Assignment Idea:

  • According to Chapter 1 of the text, what type of language is used in RIM's press release? What examples can you find of different barriers to communication?
  • Rewrite this segment of the press release for employees. What would you say differently to internal staff who may be affected by the decision? When you're finished, exchange drafts with a partner. Which version do you prefer and why?