(CBS/AP) TORONTO - Struggling BlackBerry maker Research in Motion (RIM) revealed Thursday that its business is crumbling faster than thought.
The mobile communications company said in a statement that its net loss for its last quarter, which ended June 2, was $518 million. RIM said it's cutting 5,000 jobs and delaying the launch of its new phone operating system, BlackBerry 10, until after the holiday shopping season.
After several delays, the first phone with BlackBerry 10 was expected later this year. It will be delayed even longer, to the first quarter of next year, RIM CEO Thorsten Heins said.
Now it will come out months after a new iPhone is expected to be released. Current and previous iPhones have made the BlackBerry look ancient.
"I am not satisfied with these results and continue to work aggressively with all areas of the organization and the Board to implement meaningful changes to address the challenges, including a thoughtful realignment of resources and honing focus within the company on areas that have the greatest opportunities," Heins said in a statement.
The jobs cuts are part of a previously announced initiative to cut $1 billion in annual costs this year. They represent about 30 percent of RIM's workforce, which is currently at 16,500.
"It is necessary to change the scale and refocus the company," Heins said on a conference call with analysts.
"I fully understand the impact a workforce reduction of this size has on our employees and the communities in which we operate. I assure you that we wouldn't move forward with a change of this size if we didn't think it was critical for our future."
RIM shares plunged $1.38, or 15 percent, to $7.75 in extended trading, after the release of the results. If they hold that level into regular trading Friday, they will set a new nine-year low.
Heins acknowledged that he delivered "a lot of tough news."
RIM lost $518 million, or 99 cents a share, in its fiscal first quarter, which ended June 2. This compares with a profit of $695 million, or $1.33 per share, a year ago.
Excluding impairment charges, the latest loss was 37 cents per share. Analysts polled by FactSet were expecting a loss of 3 cents.
Revenue fell 43 percent to $2.8 billion, well below analyst expectations at $3.1 billion.
"When a technology gets old, it's not a slow fade. It's a sharp cliff," said Colin Gillis, an analyst with BGC Financial.
"There is very little market for old technology."
Michael Walkley, an analyst with Canaccord, called the BlackBerry 10 delay a dire sign.
"The biggest disappointment is the delay of the BlackBerry 10," he said. "It's extremely challenging for them to turn around the business when their new smartphone launching that late."