RIM Job Cuts Coming, Company Under Fire

About two weeks ago, BGR.com published a letter allegedly written by a Research In Motion (RIM) executive criticizing the current state of the company and asking the dual CEO team of Jim Balsillie and Mike Lazaridis to consider how the company has gotten into the jam it's in, (it announced job cuts last month) and what strategies will best repair the damage. Since then, a number of other employees have come forward. Today, at its annual shareholder meeting, the level expressed concern ratched up several notches, with shareholders variously questioning nearly every aspect of the company's execution strategy.

RIM's market share has fallen significantly in the past three months, from nearly 29 percent to 24.7 percent and the company is no longer seen as the leader it once was. Perhaps most ominious, however, are the rumors of significant structural defects baked in to the company itself, from its approach to product development to internal transfer policies. Reuters had additional information on the meeting today:

"You're letting Apple and Android eat your lunch," one unhappy investor said, referring to the iPhone maker and Google's software, which a number of device makers use. "You're an innovator, but you're not good at selling what you make."

A follow-up article at BGR details some of the issues plaguing the once red-hot company. From that story: “One of the main reasons RIM missed the mark with the browser was because they were always proud of how little data usage a user would use,” a former executive said.

"RIM would be proud of the fact that someone would only use 1MB of data in a month in 2005, and as a result, there wasn’t ever any extensive R&D done within the browser space. Over time, that misstep affected BlackBerry tremendously as competing devices began to deliver desktop-like Web experiences. “Mike Lazaridis couldn’t imagine that consumers would be spending hours watching and streaming video to their devices, he couldn’t understand it,” the former exec continued. This is why we don’t see RIM excelling in spaces like camera technology, or displays — because the company never even attempted to anticipate the smartphone trends we’re seeing today."

Shareholders and critics alike are concerned that RIM's carrier-centric approach to the industry and apparent inability to understand the wants and needs of its customers could make it extremely difficult to reverse BlackBerry's fortunes as compared to Android or Apple. The company withstood calls to abolish its co-CEO / co-chairman method of governance (though promised to create a yearlong committee to study the issue). Some were disappointed with the company's decision not to show more of the upcoming BlackBerry models it claims to have on tap, but there's good reason to ask if this is a problem that can be addressed with anything so simple as a product refresh.

If standing criticism is accurate, RIM's current problems have been created not by an inherent lack of capable platforms, but by the company's inability to leverage those platforms. As important as new devices are, they may not address the real problem in this case.