Blackberry is to cut 4,500 jobs worldwide after announcing losses of almost $1 billion in its preliminary Q2 2014 results.
The job cuts which represent nearly 40% of the total workforce follow unprecedented losses with the Canadian manufacturer expected to lose between $950 million and $995 million, which includes an inventory charge of up to $960 million.
In a bid to claw back some of its spiralling marketshare Blackberry is changing its strategy, announcing a focus on the prosumer market, and cutting its smartphone portfolio from six to four devices.
The results follow Blackberry's announcement in August that it had effectively put itself up for sale amid a backdrop of poor sales and declining profits. Mass job cuts began in July, with 250 positions made redundant, with another 100 cut at Blackberry’s Ontario HQ, although lay-offs to this extent drastically eats its 12,000 workforce.
Thorsten Heins, president and CEO BlackBerry said: ‘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.
'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.
‘Our enterprise business continues to reflect the trust that governments and businesses have placed in the BlackBerry platform. Security matters and enterprises know the gold standard in enterprise mobility is BlackBerry.’
Analysts predicted this week that Blackberry may be preparing to hive of BBM as the most valuable asset.
Analyst Richard Windsor, said: 'This warning underlines the fact that BlackBerry’s attempt to satisfy the consumer demand for smartphones has been a total disaster and will now be stopped.The biggest question is what will happen to BBM? This is an asset that actually has some value. BBM still has around 75m users (mostly in emerging markets) that are very active (30+ minutes per day).
He added: 'Looking at the valuations being thrown around for WhatsApp, Line and others, BBM has significant value if it can be extracted from its troubled parent.'
Author: Matthew Campelli