In the midst of recent financial turmoil, Research in Motion (RIM), the manufacturer of Blackberry mobile devices, is reportedly looking at cutting a significant number of employees from its payroll. Sources have estimated that the company may slash as many as 6,500 of its current 16,500 jobs.
Last Monday, RIM’s stock fell below $10, marking the first time its shares have been in single digits in nearly a decade, as reported by All Things D. This turned out to be an indicative decline of value from the stock’s 52-week high of $39.86. On Tuesday the Canadian company surprised its investors when it reported an expected fiscal first-quarter loss. RIM’s share price has collapsed in the past year, and it is now only valued at approximately $5.4 billion, down from $84 billion during its peak in 2008.
Although many industry experts describe RIM as having a superior security and device management system, retaining its customers’ loyalty has been a huge challenge. One of the biggest issues facing RIM is that employee demands are trending away from RIM’s flagship phone, the Blackberry, and moving toward devices running Apple’s IOS and Google’s Android operating system. Once the king of the mountain of mobile devices, the Blackberry dominated the mobile email market until the iPhone was introduced in 2007, leaving it with only a third of the market share.
“The organizations using multiple devices have lost confidence in BlackBerry as a platform for the long term,” Alex Bratton, CEO of Lextech Global Services, a company that creates enterprise mobile applications, told Reuters.
“[As] people are doing hardware refreshes they are going in another direction,” he added.
Of course, all hope is not lost, since RIM does still serve several lucrative government contracts. In fact, the company recently touted the fact that the Pentagon had cleared six new BlackBerry models for use on its networks, extending their long relationship.
And when it comes to technology, down doesn’t always mean out. Remember that Apple once faced days that looked equally bleak, with the company teetering on the brink of bankruptcy in the early ’90s. So, the question is, has the death knell tolled for RIM, or can the company bounce back from near extinction? Only time, technology, and marketing tactics will tell.