BlackBerry Ltd Job Cuts Push Stock Further Down

Updated on

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.

“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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