WATERLOO, Ontario—In this tidy city that Research in Motion Ltd. put on the global business map, officials and business leaders rallied behind Canada's best-known corporation, even as investors abandoned it in droves Friday, and RIM itself warned it will be shedding jobs.
RIM shares fell 21% to $27.75 Friday on the Nasdaq Stock Market, their lowest level in five years, after executives announced the day before disappointing quarterly earnings and downgraded forecasts for the full year. The company also said it would reduce headcount as part of a streamlining operation to help cope with its slump.
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RIM "is going through a challenging time," said Waterloo Mayor Brenda Halloran, but she added "we're feeling quite confident in them and the future."
Once known as an insurance center and automotive-manufacturing base just a short drive from Toronto, the city of Waterloo has become Canada's technology hub, attracting even some of RIM's fiercest competitors, including Google Inc.
Still, RIM dominates the landscape, headquartered in a campus of some two-dozen buildings hugging the University of Waterloo, from which the company sprang. Its name adorns the city's major recreational complex.
RIM's growth—it has hired about 1,000 people every year since 2006, Ms. Halloran says—has transformed the once-sleepy university town into a bustling hub.
Indeed, while neighboring cities like Guelph and Cambridge are seen bedroom communities feeding Toronto, many of the technology companies that have set up shop in Waterloo run shuttle buses from the larger city, bringing up workers.
Waterloo officials and business leaders say the city is diversified enough to weather any shocks, should RIM take a more dramatic downturn.
RIM is just "part of a very broadly based economy in the region," said Waterloo Region Chairman Ken Seiling.
"We've seen the waxing and waning of a lot of companies," said Max Blouw, president of Wilfrid Laurier University and a board member of Canada's Technology Triangle, the region's economic-development organization.
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