BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) has not had a good day. Trading on the company’s shares was halted today so that the company could make a major announcement. But unfortunately for BlackBerry, that announcement didn’t have anything to do with an acquisition or other major deal that can save it. It was one bit of bad news after another.
And all this bad news cost the company about $1 billion in market capitalization because its shares plummeted, falling by as much as 20 percent after the announcement.
BlackBerry pre-announces horrible results
One of the big things BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) announced was that it will slash 4,500 jobs. This seems to line up with what we heard earlier this week, which was that the company was going to cut 40 percent of its workforce.
But the news just got worse from there. The struggling Canadian company said it shipped just 3.7 million smartphones during its most recently completed quarter, with most of those smartphones being BlackBerry 7 models rather than the new BlackBerry 10. It also pre-announced earnings, posting a net operating loss of almost $1 billion for the second quarter. The company said the job cuts will be part of its efforts to slash operating expenditures in half by 2015.
BlackBerry announces more news too
BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) also said it would turn its attention back to enterprise customers, which were once its bread and butter. Clearly the attempt to shift into the consumer sphere isn’t working out for it. The company also said it would trim its product line from six handsets down to four, offering two high-end devices and two low-end devices.
Revenue for the second fiscal quarter is expected to be $1.6 billion, with half of that expected to be from services. The company also expects to take a non-cash, pre-tax charge for inventory and supply of between $930 million and $960 million. BlackBerry said most of that charge is because of poor sales of the BlackBerry Z10, which was the company’s first touch screen device. The company also said to expect a pre-tax restructuring charge for about $72 million in connection with its “ongoing cost efficiency initiatives.”
BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) said its special committee is still evaluating “all strategic alternatives” as well, so apparently no deal to save the company has happened yet.