BlackBerry Suffers $1 Billion Lost, Cuts 40% of Staff


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Just five years ago, BlackBerry Limited was at the top of the smart-phone totem pole as a major competitor for the Apple Corporation. BlackBerry dominated consumer and corporate markets, alike. The famous smart-phone affectionately known as the, "CrackBerry," was a viable component in the political sector as well. President Obama was notorious for always having his BlackBerry within reach.

However, times just aren't the same for the smart-phone developer. It's been a disastrous week for the BlackBerry Corporation. While the gradually wane began in 2007, with the introduction of the iPhone, technology enthusiast predicted that the “Blackberry Killer” would be the company's downfall. But, no one ever predicted that the downward spiral would be to this magnitude. Their most recent product line of smart-phones feature the BlackBerry 10 operating system, which is a substantially amended version of the tablet's OS, designed specifically for the future generation of the smart-phone. The Blackberry 10 OS and device received highly ominous reviews among experts and consumers in key markets around the United States.

While the adverse reviews served as a minimally problematic factor, they did render a warning that forebode an even bigger issue. According to the Wall Street Journal, the unfavorable reviews were followed by the staggering drop in sales, which left the smart-phone developer with an estimate of more than $1 billion dollars worth of unsold phones. With such an enormous set-back, the possibility of breaking even to bridge the gap between manufacturing, distribution, and sales, is highly improbable. With a projected second-quarter loss of approximately $1.6 billion in revenue, BlackBerry did what most companies do when operations are about to dissolve – downsize.

On Friday, BlackBerry abruptly stalled trading activities of its shares, which has drastically plummeted by 19%, in wake of a desolate announcement. The company informed the public that approximately 40% of its workforce will be terminated as a means to cut cost in their rapidly declining operation. CBS News reports that the employment cut equates to an estimated loss of 4,500 employees, which will leave around 7,000 individuals employed.

Thorsten Heins, President and CEO of BlackBerry, released a statement in wake of the announcement:

“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. 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."

The drastic executive decision to downsize the company's staff seems to be one of the early signs of gradual abrogation. Some even feel that BlackBerry's days in the smart-phone industry are already over.


Image via NB44