September 20, 2013

BlackBerry to cut 4,500 jobs after losing $1 billion

The Canadian company expects to post a loss of $950 million to $995 million for the quarter.

By ROB GILLIES The Associated Press

(Continued from page 1)

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Pedestrians walk near BlackBerry's headquarters in Waterloo, Ontario, in July. BlackBerry said Friday that it will lay off 4,500 employees, or 40 percent of its global workforce and is announcing a nearly $1 billion second-quarter loss in a surprise early release of earnings.

The Associated Press / The Canadian Press

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BlackBerry said it wants to slash operating costs in half by the first quarter of 2015 so cutting its global headcount to 7,000 total employees is necessary. The company let 5,000 people go last year.

"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," Thorsten Heins, President and CEO of BlackBerry, said in a statement.

BlackBerry said last month that it would consider selling itself. The company reiterated Friday that a special committee of its board of directors continues to evaluate all options. The company said it plans to focus on offering only two high-end devices and two entry-level handsets going forward, with emphasis on the business market.

"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," said Heins. "This puts us squarely on target with the customers that helped build BlackBerry into the leading brand today for enterprise security, manageability and reliability."

BlackBerry, formerly known as RIM, was once Canada's most valuable company with a market value of $83 billion in June 2008, but the stock has plummeted from over $140 share to less than $9. Its decline is evoking memories of Nortel, another Canadian tech giant, which ended up declaring bankruptcy in 2009.

Of BlackBerry's remaining employees, thousands live in Waterloo, a university town 90 minutes' drive from Toronto, where everyone seems to know someone who works for the company. Residents have said they've been talking about the company in hushed tones for the past few years.

"Our thoughts are with those who have lost their jobs at BlackBerry, it is always a cause for concern for our Government," Canadian Industry Minister James Moore said in a statement.

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