BlackBerry may cut 40% of workforce to bring costs under control

Blackberry Raspberry

Canadian smartphone maker BlackBerry could fire up to 5,000 people, equivalent to 40% of its staff, in a desperate bid to bring costs under control, the Wall Street Journal (subscription needed) reported on Wednesday, quoting insider sources.

The company effectively put itself up for sale in August amid a heavy losses from its failed PlayBook tablet and a decline in its handset business and subscriber numbers and revenues. But it has so far failed to attract any public offers from private equity companies, although one of its largest shareholders, Fairfax Holdings, was reported to be trying to put together a buyout plan.

BlackBerry, led by chief executive Thorsten Heins, is due to deliver its results for the past quarter to the end of August on 27 September. Other reports – on which BlackBerry has declined to comment – indicated that it wants to try to complete a sale of the company by November.

If correct, the latest plans for job cuts, which it is said would be implemented across the organisation, may herald a retreat to a core business focussing on its profitable software and services, where it has a solid base in large businesses, financial and public sector organisations.

A BlackBerry spokesperson said: "We will not comment on rumours and speculation. As previously stated, we are in the second phase of our transformation plan. Organisational moves will continue to occur to ensure we have the right people in the right roles to drive new opportunities in mobile computing."

BlackBerry's share of the fast-growing smartphone market has slumped over the past two years as Apple, Samsung and makers of Android handsets have tightened their grip on the sector. In the second quarter its share of the world smartphone market fell to less than 3%, according to figures from the research company IDC.

More crucially, it has made an operating loss on its business for the past six quarters, and net losses totalling $855m, and the latest quarter is not expected to bring any relief.

Earlier this month the company let go a number of sales staff in Canada, while carriers have indicated that sales of the new Z10 and Q10 handsets have been slow. The company released a new handset, the touchscreen Q30, on Wednesday.

Powered by article was written by Charles Arthur, technology editor, for on Wednesday 18th September 2013 21.19 Europe/London © Guardian News and Media Limited 2010


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