BlackBerry to exit from consumer markets, cut 4,500 jobs
BlackBerry has just announced the company will cut 4,500 jobs and it will report a net operating loss of $1 billion in the next quarterly earning, mostly on inventory between $930-$960 million, mostly on the Z10, its first BB10 smartphone. The company said it shipped about 3.7 million smartphones in the quarter and achieved sales of $1.6 billion this quarter, almost half of what the Wall Street was expecting. BlackBerry is exiting from the consumer smartphone segment.
“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, BlackBerry’s President and CEO, announced in a statement. “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 now go with a product portfolio of four devices instead of six, which will be a mix of full touch and QWERTY keyboard. BlackBerry also announced it will reposition the Z10 to entry-level segment or in other words, the Z1o will receive a major price cut.
Time is running out for the Waterloo, Ontario based company, which is already open to strategic options that include taking the company private or selling it off. BlackBerry says it will have about $2.6 billion in cash with no debt at the end of the quarter.
Furthermore, the company also announced that it is targeting an approximate 50 percent reduction in operating expenditures by the end of the first quarter of Fiscal 2015. As part of this, BlackBerry will cut approximately 4,500 positions or approximately 40 percent of its global workforce resulting in a total workforce of approximately 7,000 full-time global employees.
BlackBerry says it continues to look for strategic options.