Concerns over the future of Research in Motion have gone up another notch.

In the first hour of stock trading in Toronto on Friday, RIM's stock price fell nearly 20 per cent. By the end of the day, the BlackBerry maker's stock fell 21 per cent, with shares down $7.13 to $27.24.

The company reported a disappointing first quarter and forecasts a slower second quarter. While profits actually topped expectations, the company is giving a strong warning about its financial outlook.

RIM officials announced they will soon begin to lay off staff. RIM has 17,500 employees, with about 1,000 of them in Ottawa.

"The reduction of our head count is an incredibly difficult decision, and Mike [founder Mike Laziridis] and I appreciate the impact of this on our employees, their families and the community," RIM's co-CEO Jim Balsillie told analysts during a conference call on Thursday.

RIM is headquartered in Waterloo and the company's struggles will have a major ripple effect on that community. The ripple effect is expected to be felt in a smaller capacity in Ottawa where many companies do business with RIM.

"The implications are potentially dire if RIM does not regain its mojo," tech columnist Carmi Levy wrote in The Globe and Mail on Friday.

RIM's products generally have not been setting the market on fire and critics say other cheaper phones are better designed. RIM's Playbook tablet has also sold only half a million units since it was released earlier this year.

Mike Lazaridis, RIM's founder, says the operating system for the Playbook, developed by Ottawa's QNX, which is owned by RIM, will be going into smartphones and will hit the market next year.

Even users of the RIM BlackBerrry phone have expressed disappointment that the company's products have failed to lead in innovative design and seem to be trying to catch-up with Apple and Androiod products.

RIM still had sales of $4.9 billion last quarter and a profit of $695 million but the company has lowered its outlook for the year despite the fact that both smartphone and tablet markets are growing rapidly -- yet RIM continues to lose market share.

Lazaridis says RIM is into the last phase of its transition and will be a stronger company next year.