BlackBerry has announced, amidst a sad and disappointing second quarter, that it is laying off 4,500 jobs around the world, amounting to 40% of its workforce.
The news comes as the company announced an upcoming GAAP net loss for the second quarter of between $950 million and $1 billion, on revenue of $1.6 billion. The company expects to sell 3.7 million smartphones in the quarter, down almost 50% from last quarter’s still-disappointing 6.8 million haul. Unknown at this time are the number of BlackBerry 10 devices sold as a percentage of that total, since BlackBerry still sells a number of its legacy devices in developing countries, though they said “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.” Of those 6.8 million in Q1, 2.4 million were BlackBerry 10 devices.
Today’s awful news comes in the middle of reports that the company is poised to be broken up into two or three parts, one focusing on handsets and manufacturing, the other on enterprise software and infrastructure. It also comes just a day after the announcement of its flagship Z30 smartphone and the final release dates of BBM for Android and iOS. Though there is reason for optimism in the BlackBerry camp, this news dowses much of that waning flame.
In a press release issued today, BlackBerry said that the layoffs are part of a restructuring plan to lower operating expenditures by 50% by the end of Q1 2015 (next July). Even if BlackBerry isn’t sold, though, there is still $2.6 billion in total cash and investments available to them, and they have no debt to speak of.
In a statement, CEO Thorsten Heins 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.”
BlackBerry’s Q2 earnings will be announced Friday, September 27th. Shares are currently down more than 25% on the news.