BlackBerry layoffs continue run of negative headlines

BlackBerry’s run of negative headlines continued Tuesday with the announcement of another 100 layoffs at its Waterloo headquarters.

“As previously stated, we are in the second phase of our transformation plan,” said Rebecca Freiburger, BlackBerry Corporate Communications Manager, in a statement. “As such, this week’s employee reductions, demonstrates another step forward to scale our company correctly for new opportunities in mobile computing.”

The announcement comes less than a month after 250 employees were let go from the company’s new-product testing department, and just over a year after 5,000 were let go in the company’s most significant restructuring to-date. The company has struggled to maintain market share as newer phones like Apple’s iPhone and devices based on Google’s Android operating system eclipsed the one-time smartphone leader. The company has weathered a series of hits – most small-scale, some larger – to its reputation in recent months. Some of the more significant milestones this year include:

Jan. 30 – CEO Thorsten Heins officially launches the new BlackBerry 10 operating system and the first two devices, the Z10 and Q10, based on it. He also confirms a corporate name change – from Research In Motion to BlackBerry.

March 28 – The company reports an unexpected profit - $98 million – during its fourth quarter results analyst call. It confirmed 1 million Z10 devices had sold since the end of January, and notably 55 per cent of them were the conquest buyers who had previously owned competing devices.

June 28 – BlackBerry releases disappointing first-quarter results – including an $84 million loss – amid fears the new handsets aren’t taking off as hoped. Heins confirms the PlayBook won’t get a once-promised BB10 software update, a death knell for the slow-selling tablet. The stock, which had been up close to 25 per cent on the year, plunged nearly 30 per cent.

Aug. 7 – IDC releases a report showing BlackBerry, which moved 6.8 million handsets in the second quarter of 2013, has slipped from third to fourth place in global handset sales, behind Google, Apple, and Microsoft. On that same day, comScore’s June 2013 U.S. smartphone subscriber report confirms BlackBerry lost 0.8 per cent market share between March and June, and now claims 4.4 per cent of the U.S. market. Three senior executives – Doug Kozak (VP, corporate IT operations), Carmine Arabia (SVP, global manufacturing and supply chain), and Graeme Whittington (VP, service operations) – also leave the company.

Aug. 12 – The company announces it has formed a “special committee” to investigate strategic options which could potentially include joint ventures, partnerships, acquisitions, going private, or a sale. The committee, chaired by board member Timothy Dattels, includes Heins, board chair Barbara Stymiest, Richard Lynch, and Bert Nordberg The most cheered investors, who quickly boosted the stock by over 10 per cent. Fairfax Financial Holdings Ltd. CEO Prem Watsa – BlackBerry’s largest shareholder – resigns from BlackBerry’s board to avoid any potential conflict of interest.

Aug. 19 – Jefferies analyst Peter Misek, who in July cut his estimates for the number of BlackBerry 10-based device builds from 2 million to 1 million in the month, slices another 10 per cent from his figures. Juniper Research reports weakening market share in crucial emerging markets.

Aug. 20 – BlackBerry confirms the latest round of 100 layoffs. Where they’re coming from is not specified. The stock fell 2.5 per cent shortly after the open on Tuesday, suggesting investors were already primed and ready for the news.

Chances are the bumpy ride is far from over, and Freiburger says BlackBerry will continue to communicate changes as they impact its operations.

“Our evolution as a company is ongoing and is in no way easy, but we are realistic about what is required to move our transformation forward in a timely manner,” she said. “We will be as transparent as possible as our plans evolve.”

Carmi Levy is a London, Ont.-based independent technology analyst and journalist. The opinions expressed are his own. carmilevy@yahoo.ca

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