The struggling BlackBerrry smartphone maker announced sweeping layoffs today as part of a wide-ranging corporate restructuring.
About 4,500 BlackBerry workers will lose their jobs by the end of the year, representing about 40 percent of the company’s global workforce. This will leave BlackBerry with about 7,000 full-time employees. According to the New York Times, “The cut is so deep some analysts and investors said that the company’s days as a smartphone maker were effectively over.” The company temporarily halted stock trading today to make the layoff announcement.
The layoffs are part of an effort to reduce operating expenditures by 50 percent by the end of the first quarter of the 2015 fiscal year. In a statement, CEO Thorsten Heins said in part that “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.”
The company indicated it expected a loss in the range of about $1 billion for the quarter (the second quarter of the 2014 fiscal year) reportedly in part because of disappointing BlackBerry Z10 sales.
CBS News reports that the once trendy and ubiquitous BlackBerry handset has lost most of is market share. “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.”
BlackBerry did not keep up with consumer expectations for cutting-edge devices, the Times observes: “BlackBerry’s executives initially looked down on the move to making smartphones into pocket-size computers, which was pioneered by Apple’s iPhone. But consumers preferred smartphones with full touch screens, multiple cameras and, most important, hundreds of thousands of apps. BlackBerry’s devices largely stayed the same, often with half-screens and a physical keyboard, and its initial attempts at touch-screen phones were technological failures.”
BlackBerry executives have not ruled out selling the Waterloo, Ontario, company. In August, the company formed a special committee to explore various options.
Under the current circumstances, it remains to be seen if BlackBerry has met its “Waterloo,” as a number of financial analysts claim.