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BlackBerry Plans to Cut 4,500 Jobs BlackBerry Plans to Cut 4,500 Jobs
(35 minutes later)
OTTAWA — BlackBerry, the embattled smartphone maker, said on Friday that it would lay off 4,500 employees and that it would report a quarterly loss between $950 million and $995 million next week. The layoffs will eliminate about 40 percent of the company’s worldwide workforce. OTTAWA — BlackBerry, the embattled smartphone maker, said on Friday that it would lay off 4,500 employees, or roughly 40 percent of its workforce, in a desperate bid to cut costs.
The loss is mainly the result of a write-off of unsold BlackBerry phones, as well as $72 million in restructuring charges. The company said that it would discontinue two of the six phones it now offers. The move comes as the company struggles with its core smartphone business. BlackBerry said that it would report a quarterly loss between $950 million and $995 million next week.
It’s the latest setback for BlackBerry, which was once a leader in the smartphone market. The loss is mainly the result of a write-off of unsold BlackBerry phones, as well as $72 million in restructuring charges. The company said that it would discontinue two of the six phones it currently offers.
This summer BlackBerry announced that it was undertaking a strategic review, which could lead to a sale of the company. A new operating system and phones that were introduced this year failed to revive the company after meeting with consumer indifference. It is the latest setback for BlackBerry, which was once a leader in the smartphone market.
Four years ago, BlackBerry had 51 percent of the North American smartphone market, according to the research firm Gartner. But the fast-changing industry, and in particular phones from Apple and Samsung, left the company behind.
Consumers moved to smartphones with full touchscreens, multiple cameras and hundreds of thousands of apps to choose from. BlackBerry’s devices largely stayed the same, often with half-screens and a physical keyboard.
Early this year, the company introduced its largest and most ambitious turnaround effort so far, with its BlackBerry 10 line of phones. But the new devices have not dented Apple and Samsung’s grip on the market. And the latest phone in the line, the Z30, caused hardly a ripple when it was introduced this week.
The failure of the BlackBerry 10 line of phones quickly led to speculation that the company, like Palm before it, would be broken apart and perhaps gradually disappear, at best lingering as little more than a brand name. This summer, BlackBerry announced that it was undertaking a strategic review, and many analysts expected the move to lead to a sale of the company.
No obvious buyers have emerged, at least publicly. And Friday’s announcement could suggest that the company may focus less on consumer devices.
If the company goes private, the move could help BlackBerry. Under such a scenario,it would no longer have to manage quarterly financial results and appease public investors who are often interest in short-term stock gains. But going private, even with a much smaller operation than just a few years ago, would not guarantee a return to profits and growth.