BlackBerry Lost Nearly $1B During Fiscal Q2 2014, Will Cut 4,500 Jobs
September 20, 2013 4:01 PM
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The bad news keeps streaming in for BlackBerry
Wall Street Journal
reported this week that BlackBerry was on the verge of
slashing 40 percent of its workforce
. Today, that news has come to fruition as the company announced that it would lay off 4,500 employees. This will leave BlackBerry with 7,000 employees worldwide.
In addition, the Canadian-based company announced some rather disastrous financials as well. We have been reported for quite some time that sales of BB10-based devices (Z10, Q10)
have flopped since their introduction earlier this year
. But now we know the full extent of the damage -- BlackBerry is taking a non-cash, pre-tax charge of $930 to $960 million primarily due to unsold Z10 smartphones. That figure ranks right up there with
Microsoft's nearly $1B charge for its Surface tablets
When the dust settles on fiscal Q2 2014, BlackBerry is expecting a GAAP net operating loss of $950 to $995 million.
BlackBerry President and CEO Thorsten Heins [Image Source: The Star]
"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," said BlackBerry President and CEO Thorsten Heins. 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."
BlackBerry will also transition away from producing consumer-centric smartphones and will instead focus on what it calls "enterprise and prosumer-centric" devices. Its smartphone device-count will drop from six to four, with two high-end and two entry-level smartphones.
Under this new arrangement, the laggard Z10 will become one of the two entry-level models while the
newly announced Z30
will fill in one of the "high-end" slots.
It sad that it had to come to this, but it looks as though we are witnessing the implosion of a once great smartphone company.
This article is over a month old, voting and posting comments is disabled
good effort, but...
9/20/2013 11:18:41 PM
Well it was a nice effort for BB to try, but against the big 3 - Apple/Google/Microsoft, the odds is just too much against them. Sometimes you could be a market leader for a long time and then a discruptive technology came along and threw everything you ever did into disarray. Even a refocusing on the traditional enterprise business is just going to buy some time before even that will go away. It is time for the company to start looking elsewhere. Can they build Android phone? Doubtful they can compete against the like of Samsung or Apple. But there are plenty of opportunity out there, a simple game such as GTA5 has managed to gross over 1 billion in sales in 3 days, which put the profitability of the game at the same level as The Avengers and Iron Man 3 when you consider the cost. For software developers there are always many avenue to make money.
"A lot of people pay zero for the cellphone ... That's what it's worth." -- Apple Chief Operating Officer Timothy Cook
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