BlackBerry CEO Tells Employees "Not All of You Will Be Here" Next Year
December 16, 2013 4:13 AM
BB is making a few "cuts".
Two top executives announce departure, raising the total departures in upper ranks to at least eight
a new chief executive -- John Chen
-- fallen Waterloo, Ontario phonemaker BlackBerry, Ltd. (
) (formerly Research in Motion) is marching on, even if many believe it is approaching an exit from the devices market. Versus his predecessor Thorsten Heins's
unwarranted, perpetual optimism
to at times
, his successor John Chen appears to be practicing a far more brutally realistic brand of leadership.
I. New CEO Preaches Cold Reality
In an open letter to clients he assured them that BlackBery is "very much alive," he took a more pointed tone behind closed doors. At an all-hands meeting, he told the company's top executives, engineeers, and designers (according to a report in
The Wall Street Journal
Things are going to get worse before they get better. Not all of you will be here.
John S. Chen, CEO of BlackBerry [Image Source: SAP/Sybase]
As of September, BB still employed 11,000+ employees worldwide -- down from 17,000 in 2011, after
last year's cuts
of over 5,000 jobs. After posting a loss in September, BB
pledged to cut 40 percent of its workforce, or roughly 4,500 employees
. That will cut it down to just over 6,500 employees globally, almost a third of its peak workforce.
reports that global sales executive vice president (EVP) Rick Costanzo and acquisitions/mergers strategy vice president (VP) Chris Wormald both announced they would be leaving by the year's end. While it's unclear whether either man's departure was forced, they join a growing list of BB executive departures.
Former BlackBerry sales EVP Rick Costanzo (left) and his wife (left) pose with BB's celebrity endorser Alecia Keys at a recent concert. [Image Source: Twitter]
In addition to the layoff of former CEO Heins, other recent departures included Chief Operating Officer (COO) Kristian Tear, Chief Financial Officer (CFO) Brian Bidulka, and Chief Marketing Officer Frank Boulben.
Two other VPs
also left or were laid off in July.
II. Does BB Have Anything Left in the Tank?
BB is now worth about $3.4B USD, well beneath the
$4.7B USD offered
for BB in September. That offer came from Prem Watsa, owner of Fairfax Financial Holdings Ltd. (
). Mr. Watsa holds roughly 10 percent of BB's shares.
"accepted" (tentatively) the bid
, but it appeared Mr. Watsa pulled the plug during the due diligence period. Instead, he decided to
team up with other top investors
to give the struggling asset a small financial boost and orders to overhaul.
Mr. Chen is doing about as excellent a job as possible and flushing out the contaminated, stale old blood at BB. But the question is whether BB can actually sell product, regardless of how many incompetent former leaders are sent packing.
What do you do when you cut off the diseased parts and nothing is left? [Image Source: WikiHow]
from Vitaly Korotich, editor of
, regarding Russia's last communist leader, Mikhail Gorbachev, comes to mind. Mr. Korotich wrote, "Gorbachev took this country like my wife takes cabbage. He thought to get rid of the dirt, he could just peel off the top layer of leaves. But he had to keep going until there was nothing left."
The same could be said from BB. In Q3 2013 market researchers say its handset sales fell roughly in half to 4.5 million shipments
the Interactive Data Corp. (
). That's roughly 1.7 percent of global sales, or roughly one in sixty smartphones sold. Worse yet, most of those sales were reportedly in developing markets, from buyers of BlackBerry 7 devices. Sales of BB10 were virtually nothing, in the hundreds of thousands of units, according to some sources.
Market researchers report under a million BlackBerry 10 smartphones sold in Q3 2013, while the budget priced BlackBerry 7 platform moved a few million units. [Image Source: LihPao]
So Mr. Chen must next solve an even tougher riddle -- how to convince customers they want a BlackBerry 10 smartphone.
"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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