RIM chair says board is confident execs will move company forward despite growing concerns
Much-maligned device maker to cut manufacturing facilities from 10 to three in bid to save $1-billion
Waterloo, Ont.—Research In Motion (RIM) chairwoman Barbara Stymiest assured shareholders the board of directors is “very supportive” of the company’s management team.
“We believe the company’s executive team is well positioned to lead the company forward to face its current challenges and pursue the opportunities that lie ahead,” Stymiest said at RIM’s annual meeting in Waterloo, Ont.
RIM chief executive Thorsten Heins announced two weeks ago that the company will cut about 5,000 jobs as it slashes costs across the organization to contend with faltering sales.
Among the changes, he said, the company will reduce the number of sites manufacturing BlackBerrys to three from 10.
“The management team and I have already instituted some major changes this year and there will be more to come as we work to turn around the company’s performance,” Heins told shareholders.
Heins also said he expects the company will book another operating loss in the second quarter as the company faces extra pressure on the sales price of its older BlackBerry models.
The BlackBerry maker has struggled in recent months as it as reported a loss in its first quarter and delayed the release of its much-hyped BlackBerry 10 operating system and new smartphones until the start of next year.
Shares in the company, which traded for more than $30 less than a year ago, have recently dropped below $8.
Since Heins took over the top job in January, replacing co-CEOs Jim Balsillie and Mike Lazaridis, the company’s share price has continued to fall.
Investors have been concerned about the company’s future, starting with the key sales period that runs from back-to-school season until holiday shopping, without the BlackBerry 10 products in its lineup.
Speculation has been growing that RIM’s efforts are too little too late, and that the BlackBerry maker could ultimately be sold off.
In late May, the company said it had hired J.P. Morgan Securities LLC and RBC Capital Markets to evaluate various strategies, including potential partnerships and licensing.
BlackBerry 10—which many see as a make-or-break innovation for the company—will face intense competition from the likes of Apple’s iPhone and iPad, devices using the Android operating system and possibly other rivals.
Chief marketing officer Frank Boulben said he’s confident RIM will have a receptive audience when the new operating system is launched next year.
“Before I accepted the job I made a number of calls to understand the perspective of (wireless phone) carriers,” Boulben said in an interview.
“On both sides of the pond, in the U.S. and in Europe, they are extremely supportive. They want the diversity of ecosystems, and that’s the primary reason they want us to be successful.”
Boulben, who came from the marketing department of telecom company LightSquared, said the rescheduled BB10 launch will be in “more countries than we anticipated in a shorter period of time.”
RIM will aim to first put the product in the hands of BlackBerry fans in an attempt to create a “grassroot buzz” marketing campaign, Boulben said.