September 22, 2013
Facing Massive Losses, BlackBerry Plans To Cut 4,500 Jobs
redOrbit Staff & Wire Reports – Your Universe Online
Once a pioneer in the mobile market, BlackBerry announced on Friday that it expects to report a massive quarterly operating loss and would be cutting nearly 40 percent of its total global workforce in response.
According to Reuters reporter Euan Rocha, the company formerly known as RIM expects to report a net operating loss of at least $950 million for the quarter that ended August 31. The figures are being attributed to writedowns and other factors, but BlackBerry devices have found the going rough against the likes of the Apple iPhone and the Samsung Galaxy. In the hopes of reaching out to iOS and Android users, BlackBerry made their Messenger Service available as a free download this weekend.
“This year's launch of BlackBerry 10, its revamped operating system, and fancier new devices – the touchscreen Z10 and Q10 for keyboard loyalists – was supposed to rejuvenate the brand and lure customers. But the much-delayed phones have failed to turn the company around,” said Rob Gilles of the Associated Press (AP).
Mike Walkley, an analyst with Canaccord Genuity, told the AP that BlackBerry smartphones once held a global market share of more than 20 percent, but currently they hold just 1.5 percent of the market. As a result, they will be forced to lay off 4,500 employees in an attempt to cut costs by 50 percent, Gilles said.
“This is the end of the BlackBerry as we know it,” added New York-based BGC analyst Colin Gillis. Gillis said that the company will be focusing on “becoming a niche player focused on the enterprise,” and that he did not expect to see the company advertise on television again. He also said that the company could survive as a smaller player in the industry, but also could be of interest to a potential buyer due to their lack of debt.
“That's probably the feedback they've been getting. They don't do all this if you have a buyer lined up,” the analyst told Gilles. “Some of the actions may have been driven by feedback by potential buyers down the road. Nobody wants to come in and buy the company and hold an all hands meeting and say, ‘By the way, half of you are fired.’”
The Canadian firm confessed in August that they were considering a possible sale, according to BBC News. Their new Z10 model smartphone, which launched in January, shipped just 2.7 million of a possible 6.8 million units as many customers opted to remain with their current devices rather than upgrade, the British news agency added.
“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,” Blackberry's chief executive Thorstein Heins said in a statement. “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.”