BlackBerry CEO John Chen's Letter to Employees

By Kevin Michaluk on 20 Dec 2013 09:00 pm EST
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Today was a big day for BlackBerry and the company's new CEO, John Chen. Earnings day. Between the earnings calls and media interviews, Chen also took the time to connect with the company's employees. In addition to the internal town hall webcast, he also sent a letter.

Will Connors from WSJ got his hands a copy of it and posted it, which you can read below. It doesn't sugar coat the challenges. And it does encourage employees to enjoy the holidays and come back recharged - there is definitely a lot of work to do.

At today’s Global Town Hall, I talked a bit about the state of BlackBerry and the changes we’re making to address pressing challenges.

A Tough Quarter

The overall earnings numbers this quarter are not good. BlackBerry will take a primarily non-cash, pre-tax charge against inventory and supply commitments of approximately $1.6 billion. In plain terms, we are acknowledging that we have inventory that is losing value by the day – devices that aren’t selling and warehoused components to produce even more in-market devices. This contributed significantly to a loss of $4.4 billion in this quarter.

Focusing Our Hardware Talent

This inventory write down points to a pressing challenge: how to profit from BlackBerry hardware, while reducing the risk of too much – or too little – inventory. To do this, we must focus our business on what we do well while leveraging the capabilities of our partners.

This is why today we announced we have established a five-year partnership with Foxconn, the world’s largest manufacturer of electronic products and components. They know how to manage supply chains and they have remarkable capabilities to get new products to market quickly.

With this partnership, BlackBerry will focus its resources to serve customers who value advanced security. In other words, we will continue to focus on what we do best – iconic design, world-class security, software development and enterprise mobility management.

With Foxconn’s scale and efficiency, BlackBerry can also compete more effectively in other markets. The initial focus of the Foxconn partnership will be a smartphone for Indonesia and other fast-growing markets in early 2014.

We are working on recruiting a head of our Devices business and I look forward to introducing him to you soon. I am confident that he will continue to focus our teams on areas where BlackBerry can deliver maximum value to our customers.

Capitalizing on Opportunities

It’s important to remember our operating units continue to have significant strengths and opportunities:

BlackBerry remains a leader in secure enterprise mobile device management, with a global enterprise customer base exceeding 80,000. We continue to work to shift this base to BlackBerry 10. BES 10 commercial and test server installs have increased to over 30,000, up from 25,000 in September 2013.
QNX is a leader in the automotive sector; its technology is used in more vehicle models (200+) and by more automakers and suppliers than all other platforms combined. QNX will unveil new technology in automotive and cloud services at the 2014 International Consumer Electronics Show in January.

BlackBerry is a pioneer in mobile messaging with BBM. With the launch of multi-platform BBM, we’ve seen over 40 million newly registered iOS/Android users. More than a dozen Android OEMs plan to preload BBM, including most recently LG. More importantly, as we focus on monetizing BBM, over 250,000 BBM Channels have been created by a global user base, including large brands such as Coke Indonesia and USA Today. BBM is also the most secure mobile messaging service for use in regulated enterprises.

We have also increased our cash position to $3.2 billion, meaning we have the ability to make strategic investments in areas where we think we can grow and profit.

Recharge

Turning a company around is hard work. I appreciate everyone’s commitment over the last year and I ask that you continue to work together to help move BlackBerry forward. I know that if we focus on what’s important and continually improve the way we approach our business, the quarterly results will take care of themselves. We’re bringing together a solid leadership team and we’re already making the kinds of changes necessary to move our business to profitability.

As we move into the holidays, I encourage you to enjoy some time with the people you care about and come back energized and focused in the new year. We have challenges ahead of us, but if we pull together and stay focused on our customers, we will succeed.

John

John Chen
Chairman and CEO

Reader comments

BlackBerry CEO John Chen's Letter to Employees

126 Comments

Very appropriate, I'm beginning to like this CEO more and more every day. Hope he keeps the train rolling full steam ahead come the new year.

I think he knows business wayyyyyyy more than thorsten... Hopefully he'll be able to turn around the company

Looks like I'm not the only one that will be working through the holidays :)

The shirt addict blueprint | BBM channel = C00122EC9

So will we still be able to purchase an actual device from BlackBerry here in the New World over the next five years?

High end devices designed for north American enterprise. I don't think they would deny anyone who wants to buy them. I just bought a z30 though. Christmas present to myself upgrading from the z10

Posted via CB10

I'm guessing it would be online or have to be ordered at the store? Either way I'm fine with that just as long as I can get my hands on one when it's time.
Enjoy your present!!

Lucky, i just bought myself the iPhone 5s as a christmas gift to myself and now i find out that they approved the z30 with AT&T bands

I could, but then i would be stuck with no device, -35 $ restocking fee and having to wait for a release date on the Z30 for AT&T. so returning it wouldn't be practical.

To bad your not with T-Mobile. Then you could have just traded up to the Z30 when it comes out, at no charge. Then again, if you had a Z10 you would likely not want to let it go. :)

Posted via CB10

Z10 for the win!

the main thing I want in '14 is an updated Z10 size device (roughly) with better specs and camera, and all the goodies the Z30 packs... or a Torch-style slider on BB10 - I still think that would sell like gangbusters and I'm pretty sure I'm not alone...

I do like Chen though... hope he sticks around for a while, who cares if his title says interim...

I kinda feel like they should make him permanent, and they probly want to.. but they're not doing it just in case they feel like a change is needed, it won't be a huge deal cuz they can always say "hey he was just temporary", whereas if they make him "permanent" CEO then change, it would look a lot weaker from a business perspective...

so, I'm cautiously optimistic??...

Yepp, I'm also waiting for a torch style device. That would be great to see a handset with a trackball, and ...to own.

Posted via CB10 on my Z10

Well spoken. I just switched to BlackBerry, and it looks like they've made a good choice with Chen.

Posted via CB10

And if I may say, you've made a good decision. BB10 is simply great and with so much potentials.
Enjoy, cause I'm loving my Z30 more and more each day. :)

Too bad BlackBerry didn't hire John Chen last year. But at least the right person for the job is at the helm now.

Posted via CB10

Boy, he seems to really be working fast and digging in. I'm impressed with Chen. Best of luck to him and the Blackberry employees.

Mr. Chen is a natural born leader and BlackBerry is lucky to have him. It's just a matter of time and a lot of hard work before BlackBerry is the top smartphone in an elite niche market. The media will reap the day they ever went against Mr. Chen!

Keep The Faith

I truly like that he puts facts on the table to explain what's going on. A change from creeping around what really matters, and bring a more desperate looking plea.

If I were a BlackBerry employee, I would indeed be reenergised by this letter... after the holidays!

Posted via CB10 on my Z30

Keep it Moving John! Happy to hear you and the gang are hard at work to get things done. May you and the gang at BlackBerry live long and Prosper.

LOL I guess maybe that didn't come out sounding as good as I thought it might, but honestly?! I love my Z30. The CuddlyKoala troll from BGR is news to me.

Lol I know who you speak of

Z30 :D - The Final Destination - 859 Portage ave, Winnipeg Mb Clothing|Footwear|Headwear|Headshop|Tobacconist|Tattoos - C00016D82

Yeah I'm starting to dig this dude.
I like his no bullshit approach, "people, we're in deep shit, and this is what we're going to do ", straight to the point and no sugar coating the shit.
He's fast and doesn't waste time, he definitely seems like the right man for the job, go Chen!!!

Posted via CB10

I like this John Chen guy more every day. Thor did a good job of bringing BB10 to market but I think Chen will take BlackBerry to new heights unimaginable by many. I think I might finally buy some shares in BlackBerry.

Cheers. :)

Posted via CB10

I like this guy... keep up the great work Mr. Chen we need you, we need a strong leadership to reverse the now for a BBetter and awesome future!!

#BB10Believe #BlackBerryNation #BB10Army #BB10Freak #KeepMoving #TeamBlackberry #BBMCrossPlatform #BBM4All #IChooseBlackBerry10

Posted via CB10

He has the ability to be both frank and friendly. He's a very likeable man and he comes across as being very capable.

He's somehow even managed to defang the bitter pill of the earnings report. I was expecting there to be weeks of rabid negativity and doom and gloom around here today but things are surprisingly civil.

Chen has definitely kicked things into a new gear I think and inspire confidence in a way that was sorely lacking beforehand.

In the 45+ days since he has become CEO he has taken steps to do great things! This letter just let's me know as a long time BlackBerry supporter that there is nothing to worry about! We are moving forward. This is a company that is here to stay and i know personally I'm here for the long ride!

Posted via CB10 from my Verizon Q10!

Despite being among those laid-off under Heins' reign I am encouraged by the way Chen communicates. I was so impressed by the way he handled the Earnings Report that I bought a Book Q5 Friday afternoon.

Posted via CB10

Obviously the lack of sales is the problem but someone really screwed up the inventory/production of these devices. Seems like they really over produced a device that did not have an easy road ahead of it.

Posted via CB10

I noticed in the press release the other day announcing the latest new hires that he was not referred to as "interim"CEO. I commented on this but no one noticed. Wonder if this a real change?

Posted via CB10

Good to see Mr.Chen being honest to his employees.. !! I hope their relationship with Foxconn brings fruitful results.. Leave no stone un-turned ! Go team BlackBerry!

I like this man..Awesome turn around.

BB 10 has far ahead of iOS and Android.

Wireless synching awesome.
Protect BB with free charge.

10.2.1.159 ....just awesome.........just need good marketing.

Just not sure how I feel about the Foxconn partnership. As a large scale buyer from CMs we have steered clear of Foxconn since the suicide publicity. Suicide nets are not the answer to low cost procurement.

Posted via CB10

Talk about a motivational letter. Good Job to the new CEO, he is the right man for the job to turn BBRY around. Looking forward to a boost in marketing and the next quarter.

Also like to point out, Chen hit the nail on the head.
"global enterprise customer base exceeding 80,000"
"We continue to work to shift this base to BlackBerry 10" If he succeeds in doing this, BB10 will further flourish beyond belief, for the betterment of the entire mobile industry. The last thing we want is to be bogged down by the Droid and iOS's of this world.

Wow!! What a frank, confident and fearless sounding leader he is turning out to be. Never heard of him before but whether is is a good speech writer or not the signs are definitely pointing towards a positive and confident approach to take control of a vehicle that has been running off track and eventually steering it back to a smooth and open road. My mind is now feeling convinced about investing in the BERRY. Go CHEN!!!!!!

Posted via CB10

John Chen!!! He makes me feel very optimistic about everything!!!!! Regardless, I love blackberry!!!! Thank you John!!!!

Posted via CB10

You know how everyone's always like "The Z10 is what BlackBerry SHOULD have launched in 2010." Or "the Z30 is what BlackBerry SHOULD have launched instead of the Z10" or "The Q10 is what BlackBerry SHOULD have launched instead of the 9900?" or "10.2.1 is what BlackBerry 10 SHOULD have launched with"?

Can I add this guy to that? John Chen seems to be the guy who SHOULD have been appointed CEO in January, 2012.

He doesn't need to say "laser-focused" every other sentence to come across as, well, laser-focused.

If Chen was responsible for launching of the BlackBerry 10 platform, I almost guarantee Marketing and Price would have been Dead On Right along with a solid stable version of BB10 at launch. He would have pumped out a solid hard core marketing campaign for both the Enterprise and Consumer markets.

Existing BES customers along with new customers would have been exited and motivated by the BB10 platform and a lot more would have IMO joined in with BES10 and BB10. They would have made IMO record BB10 hardware sales, because the price would have been right with Chen running the show.

We all know the Z10, Q5, Q10 and Z30 are all overpriced by at least 15% to 25%. You can make the same profit by strategically pricing the phones properly, then gain back by large volume sales versus less sales at high prices.

I mean, Thor did a fine job bringing BB10 to the world, just that he was missing that passion, that fire etc., and ended up hiring the wrong people for the job, such as the CMO for example. To me that sounds like he lacks experience in the CEO chair.

Thank Prem for the vision to bring him in.

He is the unsung hero in all of this.

The key thing is to help consumers switch to BB10 from OS7.

This has been the major sticking point for the inventory loss.

This should be the first and foremost.

If BlackBerry can provide a PDF guide as how to switch easily from BBOS7 to BB10 on their website.

This would be a step in the right direction.

Rather than leave it to BlackBerry blog websites and forums to do the leading.

Get in front of this issue.

BlackBerry...Get it done!!!

Posted via CB10

By beef with Prem is the fact the BOD made the bone head move to put BlackBerry up for sale, where in fact it didn't have to do such a thing in the 1st place. BAD MOVE, and it cost them big time in hardware sales and slower BES10 adoption.
Bad enough that bone head move drove the stock price down, caused mass confusion and Z10 returns. Not to mention all the negative articles bashing BBRY.

"We are working on recruiting a head of our Devices business and I look forward to introducing him to you soon." - Mr. Chen shouldn't be looking somewhere else... he should read the forum and he is going to realize how many experts' members CB has...

Posted via CB10

Also it's strange that Mr Chen already knows the gender of the new head of Devices. Does he already have someone lined up. Or will he only consider a man for the job?

Could be they are down to a few final candidates who are men, so yeah he would know in that case. I doubt if they are just starting the search.

Round of applause

Z30 :D - The Final Destination - 859 Portage ave, Winnipeg Mb Clothing|Footwear|Headwear|Headshop|Tobacconist|Tattoos - C00016D82

Interesting first hiring a President for global enterprise and now it looks like possibly another president for devices. I wonder if QNX and BBM will have their own presidents as well.

Posted via CB10

He sure does seem like he knows what he's doing as has everything handled! Hopefully the team at BlackBerry has some confidence in him too.

This is the kind of good feelings we were having about Mr. Heins. Nicknamed him "Thor" yada yada lol
Lets wait and see what is in store for BB and not get to giddy, we should have learned that by now. :)
Thor Heins is the one that got the Foxxconn deal going before he was let go. They are close to following what Heins has forecast for this company and the time it will take to bring it to profitability. Stage 2 it is in currently..
Chen is correct and needs to get a killer instinct sales force in place and put a stop to the nonsense being spread by others like Airwatch etc.. Better marketing of the goods in the BB10 phones needs to be advertised especially the z30
It is still going to be a bumpy ride keep your seat belts on!

It's amazing how profound the difference a strong leader creates. Remember kids...communication and how to conjugate a verb is important :)
So happy CHEN is making a positive impact!!!

Posted via CB10

I hope they go on a advertising blitz! There are too many people out there that do not know about the new BlackBerry 10,and there is no excuse for that!

Posted via CB10

Sounds like blackberry is embracing it's competition and working with them and not against them. Johns a shark.

Posted via CB10

All of this makes no sense. He is driving to nowhere. Why? This is consumer market, success and fail is all about customer satisfactions. Neither efficient inventory management nor QNX cars BBMing one to another will not save RIM from fail, if only they dont make new millions and millions customers excited about thie new phones and services. So... Any word of new phones or services? No. In 2014 there will be little to no shelves, happily selling 2012 devices.

God bless RIM. I love your phones for years, but if nothing new to impress me before next Christmas - I am too young to use oldschool stuff for years. and, again, I dont care of your books and operations efficiency.

Posted via CB10

Jerale, even not being ever sold on iPhone - I know exactly month every year, when new phone arrives. And I know it for sure phone will be evolutionary revolution. Thats the foundation of succes - hunger for new. What we "know" about future RIM phones? Except that they are under developement. What breathtaking expectations market will have, to delay buying Apple and Samsung, and patiently wait for uncertain date of new RIM phone?

It is not about releasing new phones, purely. Look and Nokia - which was and is sitting on widest hardware portfolio. Are they succesfull? Well, fairly not. Why? Because they dont innovate. Dont push customer to new - simplier and more exciting - experience. They just do "new" phones, with bigger of smaller screen, colored or not, thin and not.... Are we expecting new Q30 because it will have wider screen and bigger keys?.. I do still hope I am wrong. But I have RIM in my pocket already, while potential new customers need much stronger message from CEO - not to buy Apple :)

Posted via CB10

Praying they will have jobs to come back to. I am sure they must be worried. On the business side, I like Chen's decisions so far. Hope he keeps the core BlackBerry qualities intact.

BB Uniq BB Bold -Z10

Well Mr. Chen's brutally honest which is refreshing. I'm still perplexed with the Z10 inventory situation - BB wrote down some what $1 billion in inventory? So why not firesale the lot, unlocked, and sell direct via Web sales and bypass the carriers who were supportive in the first place? Price the Z10s at what $250 and see what happens. If that doesn't work, donate the lot to charity/NGOs and what have you and get a tax-write off or is that not possible since the inventory has already been accounted for in BB's financials? Double accounting I suppose?

I haven't really been keeping tabs on BB until BBOS 10.2.1.1055/1059 leaks came out with the ability to run a lot of 4.2.2 Android apps by directly installing apks which I find very interesting. I think BB has, for the moment, lost the Consumer Market but they need to retrench first with Enterprise/Government - institutions which require Security. I've mentioned before that BB should buy Secusmart of Germany or license their security suite. If its good enough for Chancellor Angela Merkel and the German Government, I'm pretty confident its good enough for pretty much everyone else.

As to the Foxconn deal - considering that Blackberry as a company has Security at the forefront, I'm not too sure how companies would feel about a Chinese manufactured product from a Security point-of-view. My BB 9700 Bold and BB 9810 Torch were both made in Mexico and I don't know where the Z10/Z30/Q5/Q10 are made since I don't own any of them, but the Americans and British were reluctant to use Huawei networking gear and Lenovo laptops in dealing with classified materiel. I could very well be off the mark here but if you're dealing with the DoD or MI5/6 well this could be an issue.

As to the new phone coming in March/April for Indonesia - is this really necessary? Isn't the Q5 base enough? If anything BB should roll out 2nd generation successors to the Z10/Z30 and Q10 and well if they tossed in a high end 9810-esque slider with BBOS 10.2.1.xxxx running Android apps I'd be jiggy with that as well.

Finally, interesting times for BB and Mr. Chen. I wish them all the best.

The Foxconn BB phones will be made in Mexico and Indonesia, not China as you claim. No different than your Bold and Torch so stay calm and carry on.

I like the end of the letter spend time with family, and come back energized, nice CEO.

Kevin, the aspect ratio of images within the CB10 app on the Z10 are squished vertically. Can you please get your peeps to fix it? Thank you sir!

finallyy a CEO that is not lazy.. only aiming canada and USA (probably TH to lazy ass to travel more than 4 hour) aim where the market still have potential for grow... i see glimmer of hope from this guy.. TH go to hell

Chen indeed seems like a pro. It is nice that bb will have a fighting chance with someone capable and with no allegiances or baggage from old regimes.

I really like the things this man has brought to the table in such a short period of time. I do realize that this is why he was brought on board, to help turn the company around, but so far John is not just walking the walk. Seems like he is backing it up. More then most of the others in his position with the company

A very important point he made is they have increased liquid cash by 500 million. Which is neat.

Posted from my SuperHuman Q10

Nice to see him in such good shape,I am sure he still has a lot of gas in the tank,The street was impressed and that's really good for a company .I hope we see more deals(Peugeot),announcements like the ones we've been seeing lately to make people aware BB is alive ,and keep the momentum going.

I trust this guys vision and ended up buying more stock, and also 2 more z10s for the kids christmas presents

Posted via CB10

A very good plan has been out in place, I have no reason to doubt BlackBerry will claw it's way back.

Sent from my BlackBerry Z30

Its great to see such change and leadership to steer the company into the right focus again. I have faith and recognize that organization has to go through dramatic changes to reinvent themselve. As a Canadian, I an very proud of this tech company for their commitment to give back to their community and I support them whenever I can.

Posted via CB10

The good man in the good seat!

Common', BBry, wake up now.

I'm out of the company, but I'll do my best to convert lost people in happy BB10 users; my little stone in the building ;)

Every time I see this picture I imagine him in his head saying "Yeah. I got this bitches." That confident but not over confident side smile, intelligent smirk.

Posted via CB10 with my T-Mobile USA  ‎BlackBerry Q10...SON!

Nothing motivates a team more than knowing they're in it together and there's something worth fighting for.

Sent from my BlackBerry Z30

While yes Chen does seem like a no-BS, get-it-done kind of guy, I almost want to laugh as I read all of the comments here:

'He will save us'

'Good job'

'let's go team!'

'good man, he's our leader'

I mean really - they could have hired a monkey and all you guys would fall all over yourselves with excitement. Aren't you really just happy ANYONE is there, after Thor? And why will this ONE PERSON truly make a difference in the market? How is he going to change the minds of 1000s of retail reps who would never recommend BlackBerry? how is he going to change the mind of the masses out there in the general public who think BB is dead/has no apps/is only for old guys in their 50s/all that same BS we've heard for 5 years.....

I'm hoping they can turn it around, but it's going to take a long time, and time is one thing they do not have. If they keep up with 4.4B in losses every quarter, and selling almost ZERO BB10 devices, they won't last past the end of 2014.

It just pains me to see everyone here drinking the kool-aid, when the thing is not going to last another 12 months.

I think he gives a clear letter of intention.

1) Let's stop wasting energy with carrier stores and what consumers think about BlackBerry phones, except for Indonesia which will get a great cheap phone thanks to Foxconn.

2) the future is three parts:
- enterprise mobile management for Android/iOS (not excluding BlackBerry phones but not mentioning them either)
- BBM is good but I'm not telling why yet
- QNX in cars is good, let's rendez-vous in January for OTA upgrades and cloud services for infotainment

So yes, the scope is quite different from all what the people on CB would like.

Posted via CB10

Chen is an excellent strategist. Focus on supply chain and market to stabilize BlackBerry.

Posted via CB10

John is a straight forward ceo with a clear vision and above all, he makes decisions.. let's see what the future holds for BlackBerry!

C0038297E Quote of the Day (BBM Channel)

A letter that reads transformation. The only thing that I am not happy about but will have to see how it improves the bringing devices to the market in a timely fashion, is the manufacturing of devices by FoxConn. We all know about the negative connotation that comes to mind with the manufacturer.

I think that the "we all know" will not be an issue very long.

The technical reason is that the Foxconn you are referring to is the factories in mainland China. Which is not the set of factories in the contract with BlackBerry (Mexico and Indonesia).

The pragmatic reason is that even with all the bad reputation of those specific Chinese factories, it did not make sales of iPhone go down except maybe a few hundred people.

The marketing reason is that Chen does not care anymore about the feelings of the general consumers about BlackBerry phones.

Three points:
1) The general consumers will be taken care of by QNX and BBM.
2) The corporate consumers/buyers will be taken care of by BES10
3) Emerging markets like Indonesia will be taken care of by cheap phones manufactured and maybe designed by Foxconn, and they don't care about the factories.

Posted via CB10

Don't start jumping for joy yet over one positive letter.They just sold 4 buildings for 41 mill. Thats a sure sign of a company preparing to sell.

Yeah Mr. Chen...!!! I am sure you would make some changes... I hope People look at Blackberry as a God Damn Awesome Brand...!!! I have been a BB Worshipper since 9 Years and cant see BB go through a tough phase...!!! :-)

I am in for the long term on z10 but not for long going for z30 long live BlackBerry

Posted via CB10

You guys are hilarious. Back when Heins stepped in as CEO and started firing people, every one of you were excited that he was cutting costs for operational efficiency and trimming the fat. Now, the same bullshit about Chen.

This company is dead. Your phones are about to be very nice paperweights.

We'll spoken, Chen is a great CEO with clear strategy in mind, he definitely knows what needs to focus and what needs to change

Posted via CB10

I'm a loyal BlackBerry and I'm one of those people who believes in this Company. Kudos to Mr. Chen. BlackBerry has a long and good future. :)

Posted via CB10