Ina Fried

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RIM Cutting 5,000 Jobs; BlackBerry 10 Delayed Until 2013

Troubled BlackBerry maker Research In Motion said on Thursday it is cutting 5,000 jobs and delaying an all-important upgrade of its operating system.

The moves comes as the company reported a much wider than expected loss as its traditional business has fallen off even faster than analysts had forecast.

RIM said that although it has made progress on some key features of BlackBerry 10 that “the integration of these features and the associated large volume of code into the platform has proven to be more time consuming than anticipated.”

So RIM now says to expect the first BlackBerry 10 phones to hit in the first quarter of next year, meaning RIM will only have its aging BlackBerry 7 software on all its phones during the all-important holiday season.

“RIM’s development teams are relentlessly focussed on ensuring the quality and reliability of the platform and I will not compromise the product by delivering it before it is ready,” CEO Thorsten Heins said in a statement. “I am confident that the first BlackBerry 10 smartphones will provide a ground-breaking next generation smartphone user experience.”

With the delay, RIM warned of more tough times ahead, including an operating loss in the current quarter.

“The company expects the next several quarters to continue to be very challenging for its business based on the increasing competitive environment, lower handset volumes, potential financial and other impacts from the delay of BlackBerry 10, pressure to reduce RIM’s monthly infrastructure access fees, and the Company’s plans to continue to aggressively drive sales of BlackBerry 7 handheld devices,” RIM said.

On the operational side, RIM said it has outsourced its repair operations and scaled back from 10 manufacturing sites to three. RIM said it expects to incur approximately $350 million in restructuring charges before the end of its fiscal year.

RIM also announced it has a new top lawyer, hiring former Verizon Wireless general counsel Steve Zipperstein.


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