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

×
Blackberry headquarters
AP
By ROB GILLIES

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."

Increase your money and finance knowledge from home

Reading a Stock Quote

Learn to read the ingredients of a stock.

View Course »

What is Short Selling?

Make a profit when stocks prices fall.

View Course »

Add a Comment

*0 / 3000 Character Maximum

14 Comments

Filter by:
LEE

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
yaketyyak48

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
yaketyyak48

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
chris3bs

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
toosmart4u

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
kentusm

And, the rest is due to obamie care.

September 21 2013 at 12:20 AM Report abuse -1 rate up rate down Reply
mike350785

Don't worry, this is a wonderful recovery, the best we ever had, right Dems

September 20 2013 at 11:54 PM Report abuse rate up rate down Reply
1 reply to mike350785's comment
kentusm

You are wasting your time - the libs will never understand this and will only believe the crap that the lib press feeds them.

September 21 2013 at 12:21 AM Report abuse -2 rate up rate down Reply
Christina

Blackberry had a good run. They made lots of money. Maybe they'll be able to come back with a new product. Nothing lasts forever...

September 20 2013 at 10:44 PM Report abuse +2 rate up rate down Reply
gerbersmail

When is the last time someone called you an idiot? I mean besides now!

September 20 2013 at 9:43 PM Report abuse +4 rate up rate down Reply
Don E

Oh well, another one's about to bite the dust!

September 20 2013 at 7:20 PM Report abuse +2 rate up rate down Reply