BlackBerry Ltd Job Cuts Push Stock Further Down

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BlackBerry Ltd Job Cuts Push Stock Further Down
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BlackBerry Ltd (NASDAQ:BBRY) shares dropped sharply on Monday after the Canadian firm confirmed a report of large-scale job cuts. On Friday, Mobile Syrup claimed that the company fired approximately 1,000 employees in both Canada and the U.S. On Monday, BlackBerry shares closed down 4.09% at $6.80.

Handset business was the most impacted

In a statement over the weekend, BlackBerry confirmed that the headcount reduction impacted approximately 200 employees in Canada and Florida and not the reported figure of 1,000.

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“As BlackBerry continues to execute its turnaround plan, we remain focused on driving efficiencies across our global workforce,” the Canadian firm said.

BlackBerry said it is seeking new ways to capitalize on growth opportunities as it drives toward sustainable profitability across all parts of its business. It also means that the company is more focused on hiring employees in areas that it believes will drive growth, the company said.

“For those employees that have recently left the company, we know that they have worked hard on behalf of our company and we are grateful for their commitment and contributions,” the company said.

The business units impacted by this employee cut weren’t officially specified, but several reports suggest that the cuts primarily affected the smartphone business. In November 2013, John Chen replaced Thorsten Heins as CEO, and since then, he has been on a cost-cutting mission. The company’s floundering smartphone business has been at the focus of many of the job cuts.

BlackBerry BB 10: dead or alive?

BlackBerry’s BES and device administration products are its main thrust now. The company was forced to change direction last year after the utter failure of BB 10. In November, the Canadian firm released its flagship Android smartphone, the Priv. Despite the shift to Android, Chen reiterated BlackBerry’s commitment to the BB OS last month, but the company also shut down its Built for BlackBerry certification program. This program helped developers create native apps for the platform.

Also BlackBerry’s senior director of product management, Damian Tay, almost confirmed the death of BB 10.

Tay recently said, “The Priv device is essentially our transition to Android … The future is really Android. We went [there] essentially for its app ecosystem.”

BlackBerry’s Priv started out well, but it isn’t safe either.

Chen made it clear last year that he is not committed to the hardware business, and if smartphones are not able to generate profit, “I have to think twice about what I do there.”

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32 COMMENTS

  1. He has done an exceptional job at turning the company around and positioning them for an excellent future as software company. You need to accept that not even your idea was going to save HW for the company. Only time can fix that and he is hoping that time will be sooner so he can maintain the HW side until it can be profitable again. If that isn’t feasible, he has positioned the company perfectly to make that transition with ease and precision.

  2. So you call proving his worth is by, firing people in the HW dept because he can’t envision a likeable phone? Chen caused the problem by thinking the Priv would sell.

  3. Hence why HW is likely on it’s way out. A negative ROI at this point in time with their consumer brand image means that not even your fake ideas will save the HW division right now. Only time can heal that damage.

    Fortunately the software/licensing side of the business has excellent revenue and will demonstrate over the next few quarters, IMHO.

  4. Chen is reducing the work force, this is because he doesn’t know how to get people to make the company money, so he has no choice but to reduce the work force.

  5. Figure it’s a ruse…Blackberry wants to buy back stock…so why would they not want to buy it back on the cheap side….What makes people sell off faster than a company reducing it’s workforce ?

  6. HBB I also like posting on Seeking Alpha if perhaps you would like to also comment. You can continue supporting Chen as to encourage him to continue to do things wrong. It would be nice to hear your views (:

  7. How much do you want to bet that the 200 cut is just the beginning? By the end of this month I would bet it will be at least another 1,000 gone. This is what a CEO of a company does when he is unable to prompt likable innovation. Chen drops a operating system (BB10) that cost the company a Billion dollars to build. This was done because Chen doesn’t have a clue how to make it better, this is also reflected in his ability to produce likable devices. The lead hand at Blackberry responsible for the invention of BBM was also let go, this leads me to believe that perhaps BBM may be next on the chopping block, including all employees currently running and maintaining the service.

  8. So 4% is a “sharp” decline on a day all stocks are taking a hit, and its 200 workers not 1,000 but you still chose to quote the incorrect hyperbole to headline your article. Nice trash journalism…so who is paying you to slag Blackberry?

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