BlackBerry developer Research in Motion will fire nearly a third of its 16,500 employees in a bid to stay alive for another nine months so that it can finally launch the BlackBerry 10.
RIM CEO Thorsten Heins Thursday said he would work aggressively to save the Waterloo, Ontario, company, as it reported worse-than-expected first-quarter results.
Despite the loss, RIM said it had more than $2.2 billion in cash and investments. That, plus the trimdown, ought to be enough to save the company from collapse, Heins said.
The new RIM boss will have to appear before shareholders for the first time July 10 at the annual meeting, where activist shareholders like Jaguar Financial of Toronto and Omega Advisers of New York may argue for sale of the company in total or in parts.
Our top priority going forward is the successful launch of the BlackBerry 10, said Heins, 54, who took over at RIM in January, when founding CEOs Mike Lazaridis and Jim Balsillie were forced out after continued losses.
Heins had previously taken charges in the fourth quarter for restructuring and warned of a first-quarter loss. The company reported a loss of $518 million or 99 cents a share, compared with prior-year net income of $695 million or $1.33 a year ago.
Revenue plunged 43 percent to $2.8 billion from the year-earlier quarter and another 33 percent from the previous quarter, as customers run away from BlackBerrys and bought rival smartphones from Apple (Nasdaq: AAPL), the world's most valuable technology company, and Samsung Electronics (Seoul: 005930).
Heins said the company expects to incur an additional $350 million in restructuring charges by the end of the next fiscal year.
The worse-than-expected results sent RIM shares down more than 18 percent after hours to $7.42, after losing a nickel and closing at $9.13 in regular trading. The shares have lost about 75 percent in the past year.