Ontario, Canada (AHN) – Faced with continued weak sales, Research in Motion on Monday said it would slash its workforce by 10 percent. The maker of Blackbery devices is also making changes in its executive leadership.

About 2,000 employees across all divisions worldwide will be laid off this week under a cost-cutting initiative announced last month. Workers will receive severance packages and outplacement support.

The financial impact of the layoffs will be disclosed in the second-quarter report but will not be reflected in the results for the quarter or of the full year. Benefits from the cuts and other cost-cutting measures are expected to be felt in the third quarter.

The company, which led the smartphone market for a decade, plans more lay offs “at a later date.” The reduction leaves it with a total 17,000 employees.

“The workforce reduction is believed to be a prudent and necessary step for the long term success of the company and it follows an extended period of rapid growth within the company whereby the workforce had nearly quadrupled in the last five years alone,” RIM said in a statement.

The company announced that Don Morrison, who had been on leave due to medical reasons, is retiring as chief operating officer after more than 10 years with RIM. His retirement coincides with a shuffling of senior management.

Thorsten Heins is taking an expanded role of COO for product and sales. Jim Rowan, who is responsible for manufacturing, global supply chain and repair services, will remain in his current role but also serve in the expanded post of COO for operations.

RIM is moving Patrick Spence, its longtime executive for sales and operations for regions including North America and Asia Pacific, to serve as managing director of global sales under Heins.

The Ontario-based company earlier this year downgraded its outlook for the first quarter of fiscal 2012. Last month, it reported $4.9 billion in revenue for the first quarter of 2012, its first decline in sales in nearly a decade and a drop of 12 percent from the previous quarter’s $5.6 billion.

Shipment volume of smartphones for the quarter was 13.2 million, short of lower end of the range of 13.5-14.5 million the company had projected.

RIM is seeing stiff competition from Apple’s iPhone and Android phones. The company has acknowledged that delays in new product launches, with its last smartphone having been released a year ago, has contributed to weak sales. But it insists that its financial standing is “solid” and that it is seeing growth in markets despite the slowdown.

The company was also a late entrant into the tablet market, launching its Playbook to mixed reviews early this year. RIM plans to roll out new products including the Blackbery Bold 9900 in August.

View full post on Labor Stories