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BlackBerry maker dials back jobs to fix outlook

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BlackBerry maker Research in Motion Ltd. (TSX:RIM) has begun the grim task of cutting jobs in a bid to save $1 billion as part of a plan to right the company as it races to bring its new models to market later this year.

The company said Wednesday that it's looking for at least $1 billion in savings by the end of its 2013 financial year and job cuts are part of that plan.

"RIM has reduced some positions as part of this program and may continue to do so as the company methodically works through a review of the business," the company said in a statement.

RIM -- which did not provide specific numbers regarding the cuts -- is expected to provide a business update when it reports its first-quarter results on June 28.

Wedbush Securities analyst Scott Sutherland estimated that RIM could cut as many as 3,000 employees in its bid to reduce costs, which would top last year's cut of around 2,000.

"I think RIM is finally making the hard decisions," he said. "It is a tough time for them, but they need to ensure profitability, speed to market, and get these new devices out."

Sutherland said much is riding on a new line of BlackBerry phones powered by the BlackBerry 10 operating system, expected later this year.

"I'm not sure it is going to be enough to tell you the truth. I think they need a much broader strategy change," Sutherland said.

"I think they need an ecosystem of devices and content applications and are just too far behind, unfortunately."

On Monday, contract electronics manufacturing company Celestica Inc. said it would be winding down its manufacturing services for RIM as the struggling BlackBerry maker tries to cut costs.

Celestica (TSX:CLS) said it would end manufacturing services for RIM over the next three to six months.

The job cuts had been widely anticipated since CEO Thorsten Heins announced last month that the company would reduce its staff by an unspecified number of jobs to save $1 billion.

Advance estimates on how many jobs would be lost ranged wildly from 2,000, or about 12 per cent of its workforce, to 5,000, or about 30 per cent.

Last July, RIM laid off about 11 per cent of its workforce, or 2,000 employees, marking the biggest employee reduction in its history.

In addition to its main base in Waterloo, Ont., RIM also has a customer service centre in Halifax that services users in Canada, the U.S. and South America. Other smaller offices are based in Mississauga, Ont. and Ottawa

Outside of Canada, RIM has operations in various places including Texas and the United Kingdom.

RIM shares closed down 47 cents at $10.49 on the Toronto Stock Exchange on Wednesday.

-- The Canadian Press

Republished from the Winnipeg Free Press print edition June 21, 2012 B7

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