BlackBerry confirms additional 4,500 job cuts

BlackBerryBlackBerry today issued a preliminary report on its Q2 FY2014 results and a general business update. The news was bleak and reinforces the precarious position that the company is now in. It expects to report a GAAP net operating loss of approximately US$950 million to US$995 million with revenues coming in at about US$1.6 billion.

BlackBerry device sales continue to collapse and BlackBerry 10 appears to be doing little to stem the tide. The company expects to sell a mere 3.7 million smartphones over the quarter, down nearly 50 percent over the previous quarter. Worse, the company expects that “Most of the units recognized are BlackBerry 7 devices, in part because certain BlackBerry 10 devices that were shipped in the quarter will not be recognized until those devices are sold through to end customers.”

The company also confirmed that it will cut a further 4,500 jobs. The move is part of an effort to cut operating expenditures by about 50 percent by end of Q1 Fiscal 2015 (July 2014).

Thorsten Heins, President and Chief Executive Officer of BlackBerry said, “We are implementing the difficult, but necessary operational changes announced today to address our position in a maturing and more competitive industry, and to drive the company toward profitability. 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.”

As expected, the company will also record a writedown over its inventory of unsold BlackBerry 10 devices. It expects that this could amount to between US$930 and US$960 million and is “primarily attributable to BlackBerry Z10 devices.”

BlackBerry also announced that its Special Committee of the Board will continue to evaluate strategic alternatives.

Source : BlackBerry