Troubled Blackberry maker RIM has warned that it is likely to post a first quarter operating loss, as it struggles to wrest share back from its smartphone rivals.
RIM said it would also cut a "significant" number of jobs, although it did not say how many. Two sources with close connections to RIM have said it plans to slash its workforce closer to 10,000 by early next year from 16,500 currently.
We have a string of bad quarters coming and it really is tough to see how it's going to get better.
The lack of details about the size of the loss and the job losses disappointed some analysts.
"They're clearly moving in the wrong direction right now, so I found it a little frustrating that there wasn't more detail," said Alex Gauna, an analyst at JMP Securities.
"That is a disaster. It's really bad. We did not expect an operating loss this quickly," said Peter Misek, an analyst at Jefferies & Co.
RIM's shares, down more than 75 percent over the past 12 months and trading at eight-year lows, slumped nearly 13 percent to around $9.77 a share in after-market trading, although they pulled back slightly to be last quoted at $10.38. About four years ago they traded at more than $140.
Mark McKechnie, an analyst at ThinkEquity LLC, put RIM's value at "about $10 per share," reflecting what its portfolio of technology patents might bring in a sale.
RIM is also struggling to retain its top talent after a series of high-level executive departures in recent weeks. RIM revealed yesterday that its chief legal officer was resigning and its head of global sales resigned last week to take a job at audio company Sonos.
The Waterloo, Ontario-based company hired bankers from J.P. Morgan Securities LLC and RBC Capital Markets to help the company evaluate strategies, including a possible overhaul of its business model.
