RIM Puts Some 2,000 Layoffs in Motion

Posted by on July 25, 2011 in Business Financing, Business Management, Business News [ 0 Comments ]

Canadian-based Research in Motion (RIM) is trimming what it believes is a little fat from its roster, having announced that it will lay off some 2,000 employees (11 percent of its staff). All impacted employees will receive severance packages and outplacement assistance.

The BlackBerry maker, which has not had job cuts since 2002, stated the moves were required to achieve long-term success for a struggling company. When this round of cuts is finalized, RIM is expected to have some 17,000 workers on its payroll, maintaining offices in North America, Europe, Asia and Latin America.

A onetime dominant force in the smartphone market, RIM has been fighting tooth-and-nail to remain competitive with Apple and Google in the mobile marketing industry.

With the layoffs set in motion, will such a move assist the company’s financial performance or just be a Band-Aid approach to a larger problem? A number of analysts reacted to the layoffs with questions as to whether the moves would reinvigorate the company.

One analyst noted, “The problem is you can’t cut your way into growth or market leadership, and while I’m sure there was fat at RIM, the core problem sits squarely with management.”

For small businesses out there that may be in similar situations and contemplating layoffs, can they get around the pink slip by doing other cost-cutting measures?

It is no surprise that payroll is oftentimes the largest expense for a small business, so how can such companies cut costs while still maintaining their employees?

Among the measures to try are:

  • Trimming employee benefits – Whether it is doing away with a level or two of coverages (health or financial), see if there are some areas to cut to keep your workforce in tact;
  • Cut the perks – Whether it is the monthly company get-together, club dues to the local gym, newspaper and magazine subscriptions etc. look around and see where you have some fat that can be eliminated;
  • Cutting work hours – If your office is open five days a week, consider going to a four day work week at 10 hours a day. Your office is closed for one day, thereby saving on electricity and other daily expenses. Some companies also use work furloughs to save on expenses, where-in the employee gets a day off without pay;
  • Reducing salaries – Although not a popular move, many employees would rather see a small reduction in their take home pay as opposed to having no take home pay at all. Typically, this move will be done as a last resort.

No matter which measure or measures your small business does to avoid letting employees go, take the time beforehand to exhaust all possibilities before handing out pink slips.

Layoffs are the last thing employees want, many of whom are counting on your employment to keep themselves out of even worse financial problems.

Photo credit: rattlernation.blogspot.com

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