BlackBerry to lay off 4,500 employees, or 40 percent of global workforce

BlackBerry to lay off 4,500 employees, or 40 percent of global workforce after announcing staggering $1billion loss

• Blackberry lost almost $1billion last quarter
• Revenues were just over half what experts predicted
• The cuts will leave the reeling company with about 7,000 employees
• The announcement comes as Apple launches two new iPhones expected to smash sales records

 

 

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

The stock dropped 23 per cent to $8.11 after reopening for trading. Shares had been halted earlier pending the news announced the same day rival Apple’s latest iPhone models went on sale.

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.

 

 

 

 

 

 

 

 

 

 

The iPhone 5S and iPhone 5C, Apple’s latest and greatest, went on sale earlier Friday, flying off shelves at a record pace.

Marked by the usual lines around the block and triumphant Apple fans walking out of Apple Stores to cheers, the new models received rave reviews from consumers and media alike.

The most-hyped new feature on the 5S is a new fingerprint sensor used to unlock the phone, making passwords and finger swipes ‘a waste of time.’ It also comes with an improved camera and a faster processor.

It has sold out around the world, say reports.

 

 

 

 

 

 

 

 

 

 

The 5C, a more budget-conscious model, also debuted to rave reviews.

‘Set to become Apple’s biggest selling iPhone to date,’ writes MailOnline’s Mark Pigg, the lower cost model has almost identical specs to the iPhone 5C – but comes with customizable plastic shells.

Apple offers the 5C in five different colors and expects more affluent customers to perhaps buy more than one.

 

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.’

A stark contrast to the hype surrounding every iPhone launch, Blackberry’s last new model dropped with a thud. Despite a massive advertising push and aggressive in-store sales tactics, the Z10 fell flat – despite rave reviews from the tech press.

Blackberry’s once leading market share has been eroded by both Apple and Samsung. Though there haven’t been many lines for Samsung products, the South Korean electronics giant sells more smartphones than any other phone manufacturer – android or otherwise.