Behind RIM's Fuzzy Layoff Math: It's Cutting Staff by Hiring
Yesterday, it looked as though Blackberry maker Research in Motion (RIMM) either couldn't count or was actually failing to lay anyone off despite its loud announcement to the contrary. Now that I've finally heard back from the company's PR agency, though, it's clear that RIM's problem isn't calculophobia. Instead, the company suffers from what you could call the Dieter's Dilemma: It wants to lose weight without having to eat less.
What set off the realization were the apparent inconsistencies in RIM's math:
- The company's 2011 annual report stated that there were more than 17,000 employees in the company.
- The 2011 annual information form indicated that there were "approximately 17,500 full-time employees."
- Yesterday's press release announcing the layoffs noted that the company would dismiss 2,000 employees and have 17,000 afterward.
Adding while subtracting
I had contacted both RIM and its PR firm to question the figures, but didn't hear back until late yesterday. When I did, the spin was in full cycle. The spokesperson said parts of the organization had continued to expand to support "higher growth opportunities" after the fiscal year's end in February.
To make the math work, that would mean that RIM added 1,500 people, or 8.6 percent, to the payroll in almost five months, increasing the total number of employees to 19,000. That works out to 1.8 percent headcount growth per month even as it continued to struggle -- i.e., while revenue was clearly dropping. That's certainly an odd way to lead into a "cost optimization program," i.e., corporate-speak for cutting expenses.
When I brought that up to the spokesperson, the answer was that RIM had quadrupled in size over five years, which is 6.7 percent growth a month, and that the added headcount between February and this week was less than it would have been during the expansion heyday.
In other words, RIM is cutting its headcount by ending up in the same place it was just a few months ago. Rumors of a hiring freeze or selective staffing leave it up in the air as to whether hiring new people for those high growth areas could continue. If the 1.8 percent monthly workforce growth continues, RIM would be back to where it just was within a few months. So much for cost cutting!
Related:
- RIM Lays Off 2,000 Workers -- or Does It?
- RIM is King Lear: Self-Blinded and Waiting for Death
- Microsoft Buy RIM? Don't Make Me Laugh
- RIM Earnings Are the Season's New Ugly
- 3 Ways Leaders Undermine Their Teams and Innovation
- RIM's Co-CEOs Have a Losing Attitude
- RIM Gets Desperate: Brings Messenger to Android, iOS