If RIM Folds, What Happens to Waterloo?

When BlackBerry maker Research In Motion released its quarterly earnings on March 29, few paid attention as closely as the residents of Waterloo, the small Southern Ontario city where RIM is based. Despite sales of $4.19 billion, RIM lost $125 million and nearly half of its market share compared with a year ago, now just 8.2 percent of the smartphone market that it all but created. Even after former co-Chief Executive Officer Jim Balsillie resigned from the board on March 29, a dark cloud hung over the company’s future; the stock is down roughly 80 percent since January 2011. “This is the talk of the town,” says Chris Zaptses, the longtime owner of a Mr. Sub sandwich franchise blocks from RIM’s Waterloo headquarters. “Friends ask each other, ‘What are we going to do if RIM goes down?’ ”

Research In Motion is the largest employer in Waterloo (pop. 98,780) and its sister city, Kitchener (the area is commonly called Kitchener-Waterloo, or KW), providing some 8,000 jobs while occupying 20 percent of the city’s office space. Hundreds of millions in donations by RIM and co-founders Balsillie and Mike Lazaridis (both resigned as co-CEOs under shareholder pressure in January) have bankrolled everything from food banks and science fairs to shiny new facilities at the University of Waterloo and Wilfrid Laurier University.