BlackBerry lays off 4,500 employees as stock trading is halted

BlackBerry CEO Thorsten Heins says the layoffs are “difficult, but necessary.”By Gadjo Cardenas Sevilla

Troubling news coming out of Waterloo today. BlackBerry has announced it will cut 4,500 jobs across its operations and will report a second-quarter loss of $950 million. As a result of this news, trading of BlackBerry stock was halted Friday aftertoon pending the revised outlook. Shares for BlackBerry were down more than 17 per cent at the close of trading at $8.73.

President Thorsten Heins said the announced changes were “difficult, but necessary.”

“Going forward, we plan to refocus our offering on our end-to-end solution of hardware, software and services for enterprises and the productive,professional end user. This puts us squarely on target with the customers that helped build BlackBerry into the leading brand today for enterprise security, manageability and reliability," Heins stated.

The company confirmed sales of their Z10 device which was launched earlier this year after many delays. The first device to sport the new BlackBerry 10 OS, the Z10's poor performance is the key reason for the $950 million write-off.

The Z10, which was intially the new flagship device, will now be releaged to an entry-level tier together with the Q5, which is the cheaper QWERTY-keyboard enabled device. The Q10, which is the flagship QWERTY enabled smartphone, will be joined by the upcoming Z30, a 5-inch phablet-sized device designed for businesses.

BlackBerry started 2013 with great hopes of regaining some of the market share in the smartphone market it defined years ago. Despite various product launches and a positive outlook focusing on emerging markets, the company has seen quarterly losses as the new products failed to gain momentum with consumers. BlackBerry is openly looking into various options including being acquired by another company. 

As the situation turns more desperate, BlackBerry now has to slash thousands of jobs and hastily restructure both company and product strategy in order to make itself viable for acquisition.

Source: CBC.ca

Update on Friday, September 20, 2013 at 8:09PM by Gadjo Cardenas Sevilla

It seems BlackBerry plans to retreat from the consumer market to focus on prosumer and enterprise. This would have made sense four years ago but with BYOD  (Bring Your Own Device) clearly gaining ground, it is the consumers who choose what devices they want and these are often adopted into the enterprise. Things have changed a lot from a few years ago when BlackBerry was the darling of enterprise and government and these institutional-type adoptions of devices were the norm.

Clearly, BlackBerry is disappointed at the poor consumer uptake of their BB10 handsets, so they're suddenly exiting that market to focus on professionals and enterprises.