July 25, 2011, 11:58 AM — It's an old story, and to be honest, I get tired of hearing it.
Out-of-touch chief executives make costly strategic blunders, leading to loss of market share, declining revenues and plummeting stock price. And who pays for their incompetence? Certainly not them!
No, about 2,000 employees of Research in Motion (NASDAQ: RIMM) will lose their jobs as the BlackBerry maker struggles to get costs under control and reverse its alarming loss of smartphone market share.
And while cutting 11 percent of the company's global workforce indeed will help on the expense side of the ledger, it's not going to do anything to get RIM back into the game against either Apple or Google.
That, quite honestly, would require new leadership. But Jim Balsillie and Mike Lazaridis will stay on as co-CEOs and chairmen, even though they were asleep at the switch as first Apple's iPhone and then devices powered by Google's Android mobile OS gutted RIM's smartphone market share and reputation.
Wall Street seems to agree that the wrong people are losing their jobs. Investors usually react positively to layoffs because they're a sign that a company is serious about getting a handle on its finances.
But shares of RIM were down nearly 4 percent Monday morning to 26.80, which not only is close to the 52-week low of 25.60 set last Wednesday, but is approaching lows not seen since September 2006.
But don't worry, RIM investors: Mike and Jim got this.
One anonymous former RIM employee, writing to Business Insider (see link above), summed up Balsillie and Lazaridis this way:
"The problem is that they brim with hubris regarding their success in the corporate market and are culturally blind to the gaping holes in their armour regarding consumer. They honestly think they understand consumer product, business, mentality, marketing - but they really don't."
We can quibble about the value of remarks from an anonymous source, but you can't deny that the substance of what the former employee said aligns with the reality now facing RIM.
Meanwhile, Balsillie and Larazaridis continue to pull down big paychecks, while about 2,000 workers update their resumes, joining the company's former marketing director, who was forced out of his job in March because, as we all know, RIM's inability to keep up with smartphone technology is a marketing failure!
As I said, it's an old story.