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Saturday, September 21, 2013

BlackBerry warns of major job cuts and operating loss

Yesterday BlackBerry announced its preliminary quarterly results and also provided an update on its plans for the business.

It says it’s expecting to make a loss of between $950 million to $995 million (up to £621 million) in the past quarter (Q2 of its 2014 financial year), with most of this value being written-off due to poor sales of the Z10 smartphone. Revenue was $1.6 billion.

Overall, 3.7 million BlackBerry phones were shipped in June, July and August, with approximately 5.9 million handsets sold to end-users.

In addition, restructuring plans will see staff numbers being cut by around 4,500 employees; approximately 40% of the company workforce. It’s part of a plan to cut operating expenditure by 50% and will result in a total workforce of 7,000 full-time staff.


While BlackBerry’s management continues to consider joint ventures, partnerships or even a sale of the company, it’s also going to cut back on the number of devices it offers. It’s refocusing on the enterprise and ‘prosumer’ market with just 2 high-end devices and 2 entry-level devices. The BlackBerry Z10 - launched earlier this year as the first device running the BlackBerry 10 operating system - will be repositioned as an entry-level phone.

Thorsten Heins, President and Chief Executive Officer of BlackBerry, said “We are implementing the difficult, but necessary operational changes announced today to address our position in a maturing and more competitive industry, and to drive the company toward profitability.  Going forward, we plan to refocus our offering on our end-to-end solution of hardware, software and services for enterprises and the productive, professional end user. This puts us squarely on target with the customers that helped build BlackBerry into the leading brand today for enterprise security, manageability and reliability.”

Author: The Fonecast
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