RIM prepares for radical measures with global restructuring
Patrick Spence, who quit this week as Research In Motion Ltd.'s global sales chief, was not the first senior executive to leave the struggling BlackBerry maker this spring and he will not be the last, as the company prepares for thousands of additional layoffs.
Context & Ripple Effects
RIM's spring has been a controlled demolition of its leadership bench. In late March the company reported a Q4 miss that took Jim Balsillie off the board and pushed out both the CTO and COO on the same day it began laying off high-level staff, and by mid-April reporting showed a former executive had sought a strategy shift before quitting rather than wait for one. Patrick Spence's departure as global sales chief extends that pattern into the commercial side of the house.
The Globe and Mail's report that thousands more layoffs are coming as part of a global restructuring travelled unusually widely — Reuters, CNET, Engadget, The Verge and four other outlets picked up the same story — which itself signals how much attention any RIM self-amputation now draws while BlackBerry 10 remains unreleased.
First-order effects
- RIM's sales organization loses its global chief weeks after the COO and CTO exits, leaving the go-to-market function leaderless heading into the make-or-break BlackBerry 10 launch window.
- Thousands of additional employees face layoffs on top of the senior-staff cuts begun in March 2012, deepening the cost reduction already underway since the Q4 miss.
Second-order effects
- Carrier partners and enterprise buyers now have to plan around a vendor whose sales ranks are being rebuilt mid-cycle, giving rivals an opening at renewal season.
- The scale of cuts pressures RIM's remaining product roadmap — leaked 2012 device plans were already circulating unconfirmed — because every cancelled program frees cash but narrows the portfolio BlackBerry 10 must carry.
Third-order effects
- If the restructuring holds, RIM is shrinking from a full-line smartphone maker toward a leaner company betting its existence on a single platform launch, a pattern that historically ends in acquisition, licensing, or niche survival for hardware vendors that miss a platform transition.
- Persistent executive churn at the top of a struggling hardware maker tends to accelerate further departures as each exit lowers the perceived cost of leaving — the exodus becomes self-reinforcing unless the new platform ships and stabilizes morale.
The trend: RIM's 2012 restructuring is one data point in the consolidation of the smartphone market around two ecosystems, where vendors without a viable third platform respond with successive rounds of layoffs, executive exits, and strategic retreat.