BlackBerry to Lay Off 4,500 Employees, 40% of Its Workforce

Blackberry headquarters

TORONTO -- BlackBerry (BBRY) said Friday that it will lay off 4,500 employees, or 40 percent of its global workforce, as it reports a nearly $1 billion second-quarter loss a week earlier than expected.

The stock dropped 23 percent to $8.11 after reopening for trading. Shares had been halted earlier pending the news.

BlackBerry had been scheduled to release earnings next week. But the Canadian company said late Friday afternoon that it expects to post a staggering loss of $950 million to $995 million for the quarter, including a massive write down of the value of its inventory due to increasing competition. Revenue of $1.6 billion is only about half of the $3 billion that analysts expected, according to FactSet. The company's expected adjusted loss of 47 cents to 51 cents per share falls far below the loss of 16 cents per share projected by Wall Street.

BlackBerry said it wants to slash operating costs in half by the first quarter of 2015 so cutting its global headcount to 7,000 total employees is necessary.

"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," Thorsten Heins, President and CEO of BlackBerry, said in a statement.

The BlackBerry, pioneered in 1999, was the dominant smartphone for on-the-go business people and other customers before Apple debuted the iPhone in 2007. Since then, BlackBerry Ltd. has been hammered by competition from the iPhone as well as Android-based rivals like Samsung.

In January, the company unveiled new phones running a revamped operating system called BlackBerry 10. The Z10 and Q10 were designed to better compete for customers and rejuvenate the brand. But vendor marketing was uneven and BlackBerry's market share continues to lag its rivals.

BlackBerry said last month that it would consider selling itself. The Waterloo, Ontario-based company reiterated Friday that a special committee of its board of directors continues to evaluate all options. It also seemed to say that it would shift its focus back to competing mainly for the business customers most loyal to its brand.

"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," said Heins. "This puts us squarely on target with the customers that helped build BlackBerry into the leading brand today for enterprise security, manageability and reliability."

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Don't worry, be happy it's only 4,500 unless you are one of those laid off or one like me who has not had a job in more than three years.

September 21 2013 at 11:46 AM Report abuse +1 rate up rate down Reply

Since the tbags want to shut down our gov't so bad, it should be shut down ONLY for the tbags! No medicare, social security, and so one. For the rest of us....the gov't will be open for business as usual. I still say the tbags should leave the North American Continent and go find an island to live and govern as they would like on their own! Leave the rest of the US citizens alone!! Goodbye Koch boys, boehner, cantor and so on.ALSO all of congress!

September 21 2013 at 9:44 AM Report abuse +3 rate up rate down Reply

In America, there are few jobs. I hope that in Toronto these laid off workers don't face the challenges that Americans do. Good luck to all of you!

September 21 2013 at 9:37 AM Report abuse +2 rate up rate down Reply

CEO should be layed off or fired. Not the workers. It is NOT their fault!

September 21 2013 at 8:33 AM Report abuse +2 rate up rate down Reply

Two worker households that are living on both wages, ever wonder what will happen to you if you or your mate or both get sick, in an accident, fired, laid off, dies, or otherwise can no long earn? Think about it.. it happen in a split second..

September 21 2013 at 2:01 AM Report abuse +3 rate up rate down Reply

The Circle of Economic Life ©

The circle consist of several elements, starting with education. Education allows a being, us humans, to learn a trade that is useful to someone else, and without being useful, we shall perish.

The second part of the circle is the job. A job allows us to use our education to produce a service or product that is useful to someone else, and for this we are given a value and paid for our services.

The third part of the circle is the Profit. Profit allows us to take our value and use it to increase the means of generating that profit. In short we use profit to provide growth that can produce more profits.

The forth part of the circle is Investment. Investment allows us to help ourselves as we help others in their quest for Profit or some gain.

The fifth part of the circle is actually the first part as we have completed the circle and are back to the starting point, education. We used the education to produce the jobs that gave us the profits that we used to invest in education so that we, or the next generation of we, can produce jobs, etc.

What has happened to the U.S.A. is that the Circle has been broken by Greed and Corruption at the highest levels, and the profits are being horded by a select few that are not investing in the U.S.A. or its people that originally generated the profits.

September 21 2013 at 2:00 AM Report abuse +5 rate up rate down Reply

There is a Film named 'Inequality for All' by Robert Reich and it details the path that we, the citizens of the world, are on, and provides some suggestions on how to repair the Circle of Economic Life ©. Good reading for all.

September 21 2013 at 1:55 AM Report abuse +4 rate up rate down Reply

$2,000,000,000,000.00 is the amount of U.S.A. currency held by the top 400 wealthy industrialist (Crooks) in the U.S.A. This comes to $5,000,000,000 each, how much of this wealth are you getting?

September 21 2013 at 1:52 AM Report abuse +3 rate up rate down Reply

Hey republicans, did you read the article about the worst states. Yup, they are all yours, all red states that vote republican all the time. Goes to show you the GOP is not good for the country.

September 21 2013 at 12:58 AM Report abuse +3 rate up rate down Reply
1 reply to toosmart4u's comment

Today the Republican party tried to blame their 'Worse State' status on the fact that they have some Democrats in their states; I still cannot stop laughing.... True story...

September 21 2013 at 1:50 AM Report abuse +4 rate up rate down Reply

And, the rest is due to obamie care.

September 21 2013 at 12:20 AM Report abuse -1 rate up rate down Reply