All I can say is thank God I sold my RIM stock today.
There was a story I read earlier today that suggested RIM would be laying off 3,000 people, but the impression I got was that it was part of the 5,000 it announced a few weeks ago.
Looks like the story (or my interpretation of it) was wrong. According to the Globe and Mail, citing Cantech Letter, the cuts would be in addition to the 5,000.
So let that soak in for a minute. Rim was at approximately 16,000 when they made the cuts (dropping them down to 11,000 employees). Another 3,000 would bring them down to 8,000 staff - literally shedding half the company in approximately a month.
I'm all for right-sizing during tough times, but that is just insane.
It's partly insane because how in the world does RIM expect to compete with half its original workforce?
But its even more insane because what has changed in the past three weeks to warrant another 3,000 fires? Seriously, something had to have changed.
It's a TERRIBLE sign when a company does a massive round of lay-offs, and then three to four weeks later says 'Oops, we still need to cut another 3,000'.
It tells you that RIM has no idea what it is doing and is flying by the seat of their pants right now.
The only plausible reason for this new round of cuts would be that sales are crashing hard and fast.
I'm sure RIM's initial budgeting process accounted for a drop in sales, hence why they had to lay off 5,000 people. The fact that they are laying off another 3,000 suggests that the drop in sales is far far worse than anyone could have thought.
It's the only plausible reason for new lay-offs of this size. If these lay-offs were known to be needed it would have made a lot more sense to do them all at once (not staggered apart by three weeks). Springing another 3,000 out of the blue is just about the worst possible news I can imagine right now.
I suppose the stock could see a slight boost if the markets take this news to mean that RIM is approaching a point of desperation and will seek to be acquired. Personally I'd expect the stock to sell off because there's no question in my mind that this is only an action you would take if sales are tanking far more than you had expected them to.
If morale at RIM was slipping this is simply going to destroy the remaining work force.
My new prediction for RIM, which in a round-about-way brings us back to my views on RIM initially, the company must go for an acquisition as soon as possible. Things are obviously falling apart faster than anyone expected and the lay-offs suggest to me that RIM is seeing a mass exodus in its customer base.
There was a story I read earlier today that suggested RIM would be laying off 3,000 people, but the impression I got was that it was part of the 5,000 it announced a few weeks ago.
Looks like the story (or my interpretation of it) was wrong. According to the Globe and Mail, citing Cantech Letter, the cuts would be in addition to the 5,000.
I'm all for right-sizing during tough times, but that is just insane.
It's partly insane because how in the world does RIM expect to compete with half its original workforce?
But its even more insane because what has changed in the past three weeks to warrant another 3,000 fires? Seriously, something had to have changed.
It's a TERRIBLE sign when a company does a massive round of lay-offs, and then three to four weeks later says 'Oops, we still need to cut another 3,000'.
It tells you that RIM has no idea what it is doing and is flying by the seat of their pants right now.
The only plausible reason for this new round of cuts would be that sales are crashing hard and fast.
I'm sure RIM's initial budgeting process accounted for a drop in sales, hence why they had to lay off 5,000 people. The fact that they are laying off another 3,000 suggests that the drop in sales is far far worse than anyone could have thought.
It's the only plausible reason for new lay-offs of this size. If these lay-offs were known to be needed it would have made a lot more sense to do them all at once (not staggered apart by three weeks). Springing another 3,000 out of the blue is just about the worst possible news I can imagine right now.
I suppose the stock could see a slight boost if the markets take this news to mean that RIM is approaching a point of desperation and will seek to be acquired. Personally I'd expect the stock to sell off because there's no question in my mind that this is only an action you would take if sales are tanking far more than you had expected them to.
If morale at RIM was slipping this is simply going to destroy the remaining work force.
My new prediction for RIM, which in a round-about-way brings us back to my views on RIM initially, the company must go for an acquisition as soon as possible. Things are obviously falling apart faster than anyone expected and the lay-offs suggest to me that RIM is seeing a mass exodus in its customer base.
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