Blackberry to lay off 4500 employees
Poor sales of BlackBerry smartphones have forced the company to take a massive writedown on the devices and slash 45 hundred jobs across its operations.
The Waterloo, Ont.-based company delivered the dismal announcement late Friday afternoon, which sent its shares tumbling.
The stock closed down 16 per cent, or $1.74, to $9.08 on the Toronto Stock Exchange.
BlackBerry says it expects to post a loss of US$950 million to $995 million when it reports its second-quarter earnings next Friday.
Most of that will come from a massive writedown of up to $960 million mostly due to poor sales of its BlackBerry Z10 touchscreen smartphones.
It will also book a $72 million restructuring charge related to changes in its operations, which include previous layoffs.
The company says job cuts will help it halve its operating costs by June 1, 2014. Earlier this week, BlackBerry had dismissed reports of its plans to reduce its staff as rumours and speculation.
About 7,000 employees will remain at the company, it said.
BlackBerry management also continues to evaluate its strategic alternatives under a plan announced last month, which could include a sale of the company.
Chief executive Thorsten Heins called the latest announcement ``difficult, but necessary'' for the company.
He said the company will refocus on professional smartphone users.
``This puts us squarely on target with the customers that helped build BlackBerry into the leading brand today for enterprise security, manageability and reliability,'' he said.
BlackBerry also disclosed Friday that it will simplify the number of phones it offers, reducing the portfolio to four devices from six.
Half of the lineup will be marketed towards higher-end consumers, while the other two will be for entry-level customers.
The BlackBerry Z10 will be sold as an entry-level device under the plan, it said.