Sunday, September 22, 2013

Bad news from BlackBerry: 4,500 jobs to be cut, expected Q2 net operating loss of over $950 million

Things haven't been going well at BlackBerry for awhile, what with lackluster adoption of BB10 and the hardware running it, and rumors that massive layoffs are coming before the end of the year. Today, the company confirmed the latter rumor, announcing that it will lay off around 4,500 employees as a part of a plan to reduce its operating expenditures by half over the next year. The plan's necessitated by an expected Q2 2014 net operating loss of almost one billion (955-995 million) dollars, driven primarily by the lackluster sale of its BB10 phones -- the company will take a pre-tax charge of $930-960 million which can be attributed mostly to the failure of the Z10 to sell. BlackBerry expects revenue for Q2 to be $1.6 billion, which is roughly half of the $3.1 billion it pulled in last quarter.
Needless to say, the financial outlook for the company isn't good, and some changes are in order. In the near term, the Z10 will be priced " to make it available to a broader, entry-level audience," leaving the Z30 as BlackBerry's all-touch flagship. To try to turn things around in the long term, the company's going to refocus on its enterprise offerings and will reduce its device portfolio from six devices to four, with two high end and two entry level phones. And, don't get it twisted, the days of BlackBerry courting mainstream consumers is all but over -- its future phones will be aimed at the "enterprise and prosumers."

 Source: Engadget

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