I’m happy to hear about the larger round of job cuts at BlackBerry

By Chris Umiastowski on 20 Sep 2013 04:20 pm EDT
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On Wednesday of this week, the WSJ reported that BlackBerry may cut as many as 40% of total jobs. When we talked about this on the latest CrackBerry podcast, we were not yet sure if the 40% number was accurate, or if these cuts were above what the company had already said they’d do.

Then we did some of our own digging and we found out the headcount would be dropping to about 7600, verifying the WSJ report. I was all set to publish an editorial on this, which I wrote this afternoon in a car en route to Ottawa, when BlackBerry put out a press release with details confirming something we already knew. When Kevin BBM’d me to tell me the stock was halted, my reply was, “I figure profit warning, confirmation of layoffs and inventory write down”. Turns out that’s exactly what they announced moments later.

The preliminary quarterly results show a huge loss ... almost a billion dollars. But it’s all coming from the non-cash charges associated with writing down inventory. Backing out the inventory write down it looks like the business is still pretty close to break even. But the signs are bad, since BlackBerry only sold 3.7 million handsets in the quarter. Most of these handsets run BlackBerry 7, which means there has been a very significant decrease in quarter-over-quarter sales of BlackBerry 10. 

The company announced its intention to refocus on enterprise and prosumer markets, with plans for only 4 devices (2 high end and 2 entry level) rather than 6. They confirmed plans to layoff about 4500 employees, which are new layoffs, and take the headcount down to be about 7600.

Let’s look at the job cuts. Almost always, cuts like this happen in a reactive manner. Things aren’t going well in the business, and senior management responds with cost cutting. If that was all there was to this I’d be overly negative also. But when I think back to how quickly BlackBerry grew in the two years prior to the business peak, it is my observation that they let hiring get way out of hand. Just consider how many handsets they were pumping out each year. Each handset required a hardware design team, supporting software versions, marketing, carrier teams, supply chain management, and support from accounting and legal.

I’m not saying all of the bloat was driven by hardware launches, but it’s one solid example.

I think if BlackBerry had never gone through the hyper growth and resulting crash the employee base would never be sitting at over 10,000 today. Given the concentrated nature of their business (smartphone hardware, software and a NOC), they really should not require that many employees.

Facebook has 5300 employees. They don’t make phones but they create a lot of software for desktops and mobiles on multiple operating systems. Google has almost 45,000 employees yet they dominate the Internet with Adwords, Adsense, YouTube, endless other services, and oh yeah ... a little something called Android and the hardware business they bought from Motorola. Given the incredible number of projects that Google runs I can see why they have so many employees. BlackBerry in no way needs one quarter the number of employees compared to the world’s largest Internet company.

It’s always sad to see jobs get cut. On a personal level, it sucks to know that plenty of loyal, smart and hardworking BlackBerry folks are about to lose their jobs. And it’s also easy to see why so many people are writing that these cuts spell death for the former smartphone king.

I don’t think there is any way to avoid sounding like I’m sugar coating bad news. That’s fine. That is what happens when you discuss the necessity of job cuts as a company reacts to the market rather than being proactive, as I wish BlackBerry had been. But these cuts are necessary. BlackBerry needs to get back to having a manageable base of employees who are focused on the few critical projects and programs.

A leaner BlackBerry with 7600 employees seems like it should be able to make decisions faster and get the important things done. Key word being “should”. In the end it all comes down to execution, which is where people have a perfectly valid reason for criticizing the company over the last few years.

If you think about all the things Facebook has launched in the last year such as Graph Search, Facebook Home (including Chat Heads), all sorts of new advertising features, and of course Instagram Video ...all while growing their revenue base and doing this with 5300 employees ... it seems ludicrous to me to suggest that BlackBerry needs much more than 7600.

These cuts, they say, will reduce operating expenses by about 50% within 3 quarters. If they want to be profitable as a smaller, niche player this is what they have to do.

Topics: BBRY Editorial

348 comments

Kevin Michaluk

I hate layoffs. Understand the view point of them being necessary in this case. My sincere best wishes to everybody at BlackBerry that has been working so hard these past few years to push BlackBerry 10 to market. I know it was a Herculean task. To anybody effected by this news at BlackBerry, I personally wish you all the best at landing into something new that's engaging and rewarding. THANK YOU for all your efforts.

d_elkhori

Kevin you are my biggest BlackBerry fan and I love those BlackBerry shirts that you have I wish to have some as well

Posted via CB10

ianbordas

Chris, Kevin: Why did BB post this info before time? Doesn't really make sense unless they WANT stocks to go rock bottom, maybe it's an easier way to get the company back to private??

sakin13

they are obliged to if there is a significant difference from what the market expects they are obliged to issue a warning.

freddysrevng3

Really???? Hmmm.. BlackBerry stock lost about $4 per share on their last report... Was the "impending shitty news" not "significant difference" sic enough prior to last quarter's report?

Thorsten Heins sounded completely shaken and befuddled on that call - pretty sure have not heard from him since.... The $55 million Man to Be has really been courageous of late in facing us.... Kevin talks to him, once in a while, I think they play gin.

boldbb10

Kevin. I totally agree with you. I'm really sorry for the people and the families this will effect. That being said these people were under leaders that took their eyes off the ball. They thought that being innovative wasn't needed. Other technology companies just basically walked in and took over. You did this to yourself BlackBerry. Let this be a lesson learned YOUR RESEARCH HAS TO BE IN MOTION .

Posted via CB10

thedustytaco

Thank you to all those who contributed to blackberry. I hate how everyone thinks a layoff is bad for a company especially like blackberry. Such as critics will state something stupid as blackberry is dying

Bobert_123

The layoffs are good for the company, but the fact that it's necessary is bad.

4abetterworld

I'll shed a tear today for all those that lose their jobs. I want to thank them for the contributions they made to a great company and their efforts to change the world for the better.

But now is the time to get up, wipe away the tears, dress the wounds and show the world that you can! It's what "Keep Moving" is all about. We're behind you 100%!

G-bone

+10

#IchooseBlackBerry10

brendilon

Nearly a billion dollar loss on the quarter. 40% reduction in workforce. Marketshare under 3% globally. Declining adoption of their current OS which was supposed to save the company.
To say "Blackberry is dying" is not stupid, the company IS dying. It's not dead yet, so there is a chance to turn things around, but it's going to be extremely difficult.

KermEd

True

Posted via CB from my LE

iwasspartacus

They won't be able to turn it around with the current leadership... from the BOD to the CEO to the CMO and all those Product Managers who have so fully shit the bed.

Everyone of the groups are accountable for wildly missed forecasts... remember... these decision makers have spent that precious cash on devices they 'hoped' would gain traction in the market place, and it is now obvious that there Market and Customer learning was non existent. They spent money, stuffed the channel, all due to the wrong information. They announced 'coming soon' apps based on the wrong information. They celebrated non-existent carrier relationships in the USA due to wrong information.

This isn't a conspiracy...this is the natural outcome of an organization not being able to compete in their chosen market.

It's really over.

Posted via CB10

badonkadonk

Good summary. As an investor, I have been amazed the last 3+ years that the BOD keeps being re-elected given their gross negligence and incompetence. But majority get 90% or more votes.

savingblackberry

The reason is most of the shares are held by in-bred canadian funds who have no guts to voice dissent.

dporter6

Of course they can turn it around! "Tis merely a flesh wound!"

Superbuddy2007

Well said, Kevin.

Edit: Also, great write up, Chris.

Unbiased Tech

I do as well. It's quite sad that that many people are losing their jobs especially considering the reported high level of morale that was going on. It's just the nature of the business though. When upper level management screws up, it's the dedicated and hardworking employees that have to pay the price.

We need answers now. No sugar coating from Thorsten or any of the board. Shareholders are losing money I'm sure and no one knows whether or not the company is leaning towards a sale, partnership or privatization. I'm a proud owner and early adopter (at least in the US) of BlackBerry 10 and I'm happy with my purchase and the amazing os known as 10.2. I just wish the rest of the world knew.

Posted via CB10

mobilesync

I agree and disagree with you. Yes the management made big mistakes. They are incompetent. However, over the past few years RIM did hired many bozo employees. Those must go with some crap managers.

axe50

That's the problem though. The heads that are rolling are not the ones making the decisions, that are accountable. By keeping them we are setting up for an instant replay in 3 months.

Posted via CB10

Jtaylor1986

The title is a little tasteless nonetheless

donemt

Yes it is! A better title could have been used

medicdon

birdman_38

Good point. These cuts cast a pall on the company, it's employees, and fans alike. CrackBerry's industry analyst says he couldn't be happier about it. WTF?

freddysrevng3

Kevin - You are "correct" about layoffs being bad. Apparently, the only purpose for BlackBerry being in existence - at this point - is to ensure that Thorsten Heins, Frank Boulben and the rest of the executive team "Enjoy the Obscene Financial Spoils" that they are about partake in upon sale of BlackBerry.

Lord knows that these guys have worked "very hard" to take the mantle of this company from Jim Balsille and Mike Lazaridis and drive it, even further, into oblivion.

For all their "hard work" they will make millions of dollars - while shareholders large and small have lost millions of dollars. There is a certain "beautiful symmetry" in that...

Thank goodness that these guys will be well taken care of .....

Hopefully, the Board of Directors which has hired and kept these gentlemen in place will also benefit handsomely from the "hard work" they have done.

I may have to reconsider purchasing the Z30...

Chris what do you suggest I do with my thousands of shares of BlackBerry stock?

iwasspartacus

Sell in December for the tax loss. What the rest of us will do.

Posted via CB10

iseeblackberry

I was waiting for Chris' take and Kevin's response sums it up very well.. Thanks

nick canada

Nice words Kevin I agree

Its hard to stay positive this is terrible news on what was such a great for BlackBerry 10.2, z30 xBBM, usb to go, and bridge

BlackBerry forever!

Posted via CB10

IJKBB10

The bad news just keeps on coming never ending

Posted via CB10

thisiscjay

Somebody needs to get you guys hired by BlackBerry... you're pro BB while still maintaining a balanced perspective. Solid..

iwasspartacus

Poor title. I'm happy they'll finally stop devoting resources to useless niche devices like the Porsche variant. Was a tough way to get there though.

Posted via CB10

the_sleuth

I am surprised. No podcast to discuss the latest developments? Maybe next Monday or Friday?

bharuch7282

it is very easy and simple thing to put those words here to make the sufferer feel better. but the one who is really needy knows what exactly is layoff. don't take me wrong but what if blackberry is completely wiped out and somebody post here "anybody in crackberry".. this is the fact and that is the reality

yvpan1

i agree with you Kev. layoffs is not a good thing in life especially for those who is right in the edge of losing their jobs. i understand how it is as i used to be laid off from my previous job as well. my thoughts are with you guys who have to let your jobs go from BBRY. THANK YOU, THANK YOU for being a part of us, no matter what you do, you guys have contributed A LOT and A LOT MORE to the company and to the community as well. wishing you guys all the best and always, #keepmoving. be proud of yourselves as you guys used to be a part of a proud Canadian company which has brought the mobile era to the next level. it's not the Americans but it's the Canadian who did that.

i'm not a Canadian but I envy BBRY as a company. Mr. Heins, no matter what people are yelling at you at the moment, keep your hands on the wheel and drive us inside your ship towards this stormy weather. the road to the winning is just about to come.

jimmychen17

If they can't even make a proper phone to compete they don't deserve to be in the business.

shootsscores

The phone is excellent. The OS is excellent. Marketing has been horrible.

HKINDO

Chris, to say that one is happy that people are getting lay off in this difficult times to save his own pocket says a great deal about a man, don't you think?

Posted via CB10

Hidjk

Very bad choice of words for a title Chris...
But I'll forgive you.

www.livingtruth.ca www.carm.org

rocmon

That's lame, come on... of course it's sad for people to loose their jobs - but so what? the point is they've been doling out welfare to at least 10,000 employees for the last 5 years. I worked there as a consultant - the company 'RIM' / 'BlackBerry' was insanely over staffed! People were given manager titles just because the groups got so large - not because there was a need for new groups... managers were collecting head count and work was insanely inefficient and ineffective - and I only know about the back-office areas where SAP was selling them more and more servers and modules and add more and more consulting bodies. All for zero net gain and a fractured solution - why? Because when the cats away, the mice will play! Play time is over, time for BlackBerry to mature and kick some serious tail! Lean, mean, innovating team time - let's get Mike back and arm him with a Harvey (suits) to manage the warrior attitude.

Via Z10

w0qj

Those folks being laid off by BlackBerry will be suffering; we feel for them...

Unfortunately those bozos up at the top will get millions for a golden parachute, actually gets financially awarded for making mistakes that ran BlackBerry into the ground? (And these are basic management and marketing mistakes too).

d_elkhori

I agree with Kevin

Posted via CB10

DatMisterB

Nice article Chris, I agree with your point of view.

koolrosh

Hi Chris,

Can you please explain why Blackberry would go ahead and announce BBM and Z30 right before this disastrous news. I would think it makes sense for them to wait until the bad news is out of the way and then announce these products. They could have created some momentum with the launch of these products in the days after the earnings. Can you please explain, I have a hard time understanding the strategy.

FernCommodari

To put out the good (BBM Z30) with the bad (job cuts, Q2 results) and hope for the best.

Posted via CB10

mrabody

That seems to be the root of their problems - it's always "hope for the best".

BriniaSona

Seems that ono matter what good BlackBerry does and no matter how much more thought they put into thier phone and OS people still think they are garbage. Why, the main reason is apps. Instagram, Vine, Snapchat, Netflix, all these useless apps are the main reasons people moved away from BlackBerry and went to that silly little iPhone. I really liked BlackBerry, my main reason was because they were not an American OS, they were CANADIAN. I hope BlackBerry continues to live on, they are a good CANADIAN company.

igor10000

My words, apps for sharing selfies, duck faces and stupid videos are the main reason for the ridicule and bad perception of BlackBerry. What the hell is this world coming to?

Posted via CB10

bbq10l

Hardly- I'm one of the prosumers who wants to BYOD and not carry two phones. I don't use the apps you describe. I don't have the major banking apps, etc. Your attitude is BlackBerry's attitude. Consumers are stupid so BlackBerry didn't sell. With that attitude, BlackBerry never will. They advertised (if you can call it that)- a product that was not competitive. Don't call it a smartphone, because it's not. BlackBerry will never recover blaming and insulting the very people whose money they are trying to take.

Posted via CB10

brendilon

Yup. You can't blame the consumers for not wanting what you're selling. That's not the way the market works.

brendilon

Netflix is useless? Seriously? I'm with you on Vine and Snapchat. Probably even Instagram, but Netflix has become a pretty significant media consumption force. They get nominated for Emmy awards now for crying out loud. Were you in lockstep when Lazaridas was scorning camera phones and email in color as well?
Buying something JUST because it's Canadian regardless of quality is just as foolish as buying something JUST because it's American, regardless of quality.

BriniaSona

I don't watch english TV, that's why netflix is useless to me. They have anime, but it's all crappy dubs and like no selection.

brendilon

There's a difference between something being useless and not being something you would use. I didn't own a car or have cable TV for over a decade (I lived downtown in cities and had better things to do with my time than watch TV), I wouldn't describe either of those things as useless though.
Netflix is a hugely popular service, BB not having it is a pretty significant gap in their app offerings.

dporter6

Instagram has more users than there are BlackBerry owners. Netflix is not a "useless" app. It's a hugely successful business that has an app available for ALMOST EVERY OTHER DEVICE, EVER. There's a Netflix app for the Nintendo 3DS, and that's a video game system! It's extremely telling that there's no Netflix app for BB10.

Rene Ritchie

 

As both a huge fan of technology, and a Canadian, I’m pulling for BlackBerry. Thoughts with everyone there. It's going to hurt before it gets better, and I really want it to get better.

 

Bring on BBM!

Kevin Michaluk

You're a good man Rene Ritchie. Want to see BBM for iOS / Android rule the world of instant message!

BriniaSona

Amen, I the thought of them going away makes me cry.

freddysrevng3

Yeah!!!! Great point, Kev... that is really going to help the 4,000 of you fellow countrymen and all of us who have lost thousands of dollars in BlackBerry stock.... Wooo Friggin Hoooo...

This may be "Canadian Thing" because you guys don't have a clue, as to, how horribly run this company has been for years.... Yeah Free BBM for Fanboys... "That's the Ticket"....

I have owned 7 BlackBerrys (currently Z10, 9900 and Playbook) - was "looking forward to Z30"

But I have to be honest - between buying BlackBerrys and losing a lot of money with this dog shit stock - I have done my "fair share" to support Thor, Frank Boulben and the rest of the Clowns running BlackBerry in their - Golden Parachute Orgy - that is on the way.

Frank Boulben making $7 million if they sell the company - after the beyond pathetic job he has done - should be punishable by imprisonment.

FREE BBM.........Wow.

jh07

Well said. Too many people think whatever CB writes is true and makes sense. They act like cult people, totally brainwashed with Bullsh@t. Oh oh, I wrote a bad word, now I'm going to get infraction points from CB.

Posted via CB10

NotGoodIMO

Fully agree and understand your sentiments. I am also a shareholder and very disappointed with this current management team. They are fu*king idiots. First they price their products too high which effects their momentum and then they writedown the inventory. Anyone can run this company better than these idi*ts. I hope the top management gets fired before the company is sold.

Playbook007

Unfortunately I think they know exactly what they are doing. Driving the stock price to the basement for a private buyback.

BlackBerry will survive in the Corporate and Government Sectors! My Z10 is so much better than an iphone!

freddysrevng3

Follow the $$$$$$$$$$$$$$$ - The completely inept Executive Team at BlackBerry makes $$$$$$$$$ on sale.... As company tanks in share price, Prem gets a better price... and Kevin is excited about free BBM for Fanboys.... Huh?

It's is the "Perfect Storm of F'ing" the retail shareholder in BlackBerry...

The "Extreme Pisser" about all of this is that my Z10 is superior to iPhone and Buggy Galaxy S3 (had one) and for the U.S. media to trash BlackBerry (Canada is a great ally of ours - with really bad business people in it) is really disgusting.

drcrane

Sorry for those who lose their jobs, sorry for those who have lost large BlackBerry investments as well.

I myself lost over $8000 in BlackBerry listening to "analysts" who constantly tell you that the shares are worth their current price plus a little bit. Then the stock drops $10 and they tell you that's what their worth, drops again and they magically adjust their idea of worth again.

I bought some at $66, analysts were saying it was worth $90, bought more at $17, more around current price.

BlackBerry taught me an extremely valuable lesson - I will never, ever, ever again put too many eggs in one basket. I will limit exposure to 5% in any one stock and I will never "dollar cost average!

I now have 3% of my portfolio in BlackBerry for fun... if it goes to zero I'll lose an additional 3%, I'll be sad for BlackBerry but not hurt personally. I don't know when I'll sell my remaining shares.

All my investments from now on will be based on corporate ROI and dividends only, the less I know about the company and the less attachment I have to it the better! Again every single stock will be limited to 5% of total portfolio no matter how much of a home run I might be deluded into thinking it is.

Posted via CB10

JakeTheCat

It sounds to me like you exhibited a trait common amongst people in the stock market, namely getting excited about a stock with rosy prospects and taking an imprudent stake in it. The challenge and opportunity in investing comes from 1) knowing what you are buying and then, importantly, 2) being patient enough to wait, and wise enough to know how to "be fearful when others are greedy and greedy when others are fearful."

Two more quotes you may have heard before:
"The future is never clear; you pay a very high price in the stock market for a cheery consensus." and "The time to buy is when there is blood in the streets."

I mean the idea is to buy low and sell high, right? Not always easy to do. So what's the edge? Rationality and temperament have been cited as characteristics that differentiate some of the greatest investors. I'm sorry to hear you bought high and have also decided the less you know about a company the better. But I'm curious, does this round of layoffs sound like blood in the streets to you? Was there something else (lots of things?) in this news that made you fearful for BlackBerry's future? Is it safe yet to say the consensus around BlackBerry is not cheery? Can I assume from your comment that you now feel like you are done with ever buying BlackBerry stock? The reason I ask is because I've been circling this company for a while now and am starting to feel greedy - I'm looking out for confirmation of capitulation from existing (or recently existing) shareholders so I can stop kicking the tires.

dporter6

Horses don't have tires, and either way, this one's dead, so don't bother buying.

drcrane

Not necessarily done buying BlackBerry, done until it starts showing high internal ROI and starts to pay a good dividend and done with putting many eggs in one basket. If it meets my metrics at some point I would consider adding another 2% to my portfolio.

I sold most of my BlackBerry months ago, definitely there is blood on the streets, some wounds can be surgically repaired, I hope BlackBerry's can be... I do have some hope in that regard but I can't predict the market (consumer or stock market).

For my temperament diversification is best. Looking at internal company metrics as investment decision rather than feelings and headlines works for me ... and the "less I know" the better. I have no interest any longer in being financially or emotionally invested in a company other than my own.

If you buy BlackBerry best of luck, I really hope it goes to the moon and I'll be cheering along with all crackberrians - but not buying.

Posted via CB10

JakeTheCat

Thank you for your candor. "If you wait for the robins, spring will be over.” It sounds like a low-cost index fund could work for you.

freddysrevng3

That's very good advice drcrane. I am "right there with you" in a bad way. The other piece I would add is that when a stock is "as heavily shorted" as BBRY is - there are some sketchy characters involved, including, the scum media on this one.

badonkadonk

Honestly with your outlook you are better off investing in ETFs than individual stocks. Look at the SPDR tech ETF as an example, though it's yields are kind of crap. Same with iShares, there are some good utility / consumer / tech ETFs. You may also look at REITs again if you want yield and low risk.

Individual stock makes sense if a) you are a trader and have time to do this all day, b) you get them free as RSUs, c) you like gambling away your future 401k / RRSP value.

mobilesync

Hi Kevin, I am actually very concerned about the QUALITY of BBM4All. If this cut had happenedd 6 months ago, BBM4All for sure will have solid quality. Now, it is uncertain. If they do keep A players this time, they can make it solid in 3 months. So, not too concerned with today's good news of cut. Hope they cut more to boost product quality.

playbookdrew

Cut more for quality? Makes sense for a company that's 1/10th the size of all it's competitors..

Dodger52

What are you waiting for go out and by a Q10!

BerryWizard

very gentleman of you rene.

m1kr0

Rene, respect sir, respect. I am humbled by your response.

undone

What would make them come out with this a week early though?

Jtaylor1986

I would also like to the know the answer to this question.

JakeTheCat

It sounds like someone leaked material non-public information. Chris confirms he had access to this information himself. Taking action on that information is the basis for "insider trading" which is illegal. BlackBerry was bound to disseminate the information.

One point of clarification I'd make is that the press release said, "During the second quarter, approximately 5.9 million smartphones were sold through to end customers, which included shipments made prior to the second quarter and which reduced the company's inventory in channel."

WillieLee

Chris was an analyst for ten years. When a company halts trading pending news after there's been reports of poor sales and layoffs, it doesn't take a leap in logic to state what the cause is going to be. He didn't have access to insider information.

JakeTheCat

"Then we did some of our own digging and we found out the headcount would be dropping to about 7600, verifying the WSJ report. I was all set to publish an editorial on this, which I wrote this afternoon... when BlackBerry put out a press release with details confirming something we already knew."

Those last five words are key.

R Field

PR marketing fail. Again.

CB10 - Z10 -10.2.0.1725

insurancebroker

This is a very good question, especially before the launch of cross platform BBM. Marketing isn't just about commercials and advertising. Marketing is about everything you put out there including press releases. Why put out this kind of news the day before an important launch? I don't know why this couldn't have waited until Monday.

jsanders

Preliminary statements and warnings such as this are required by the Securities and Exchange Commission if significant changes to guidance are forthcoming.

Chris might concur with this. And, good article, Chris.

Jim Wolfson

Because they'd be liable for shareholder lawsuits if they didn't confirm something that was true after the Wall St. Journal leaked and reported this news. Public companies must disclose material information.

I was stunned to realize they still had over 12,000 employees - even 7,600 is probably too many for the resulting company that may survive.

NotGoodIMO

I think this has something to do with the sale of the company. Imagine you want to buy and are in talks with Blackberry, you see the books and know that sales are very disappointing and the stock price doesn't reflect that. Now that the news is in the open and reflected in the stock price, a buyer could give a premium and buy Blackberry for $10. I think Blackberry will be bought very, very soon.

JCardan

Yes, the BlackBerry's story is very similar to the story of Nokia.

WillieLee

When a company is going to report very bad results they will pre-warn shareholders. These are also major material changes to the business and they have to be reported.

rocmon

Why now?

Because the genius frank gets loads of free advertising...

All news headlines everywhere reported the shocking news, then mentioned the BBM launch!

Genius

Dodger52

Great editorial Chris sane as always, being realistic without being pessimistic or too optimistic.

I really appreciate your articles there are a reality check amidst all the indiscriminate BlackBerry-bashing.

icedkermit

Chris, to say charges were non-cash is highly misleading. They're "non-cash" as you describe because they've already been paid for. Please do no mislead people into thinking this didn't cost BlackBerry shareholders $1 billion. Additionally, the business is anything but close to breakeven and the trajectory is even worse. Most units sold were BB7. This couldn't be much worse.

Regarding your points about making decisions. These are typically made at the top and I haven't seen any news about sales, marketing or strategy people leaving. These are the guys who screwed up. Not the several thousand employees who are being let go.

sk8er_tor

It's a one time charge (hopefully)..... unless they're going to write off Q10s next.

icedkermit

Calling something a "one time" charge only works when trying to establish what a business is worth under normal circumstances and assuming the charge was really only a one-time cost. These are happening far too frequently to be considered one-time at BlackBerry. This is bad management.

k8bushlover

Yes, they took a loss on PlayBook inventory one time too.

sk8er_tor

Too bad but we need some good news soon. I hate all this depressing news.

Jtaylor1986

They changed their sale criteria Chris due to unusual rates of returns Chris. Not comparable.

SamFromDowntown

No, they are changing the way they recognize sales. They used to recognize when they were shipped. Now they recognize when they get sold to end user. Has nothing to do with returns.

Jtaylor1986

An unusual amount of returns has obviously prompted this change. They haven't actually sold something if the carrier returns them all. It's an accounting thing.

SamFromDowntown

yeah, @ jtaylor, that's just speculation to say that they are doing this based on high return rates. It *is* an accounting thing, but likely having to do with the write-down and cleaning up books for a sale.

Jtaylor1986

It is speculation but I don't see what else it could be. Revenue recognition and inventory valuation policies are two completely different issues. You can't just 'cleanup' the books as their statements have to be in compliance with US GAAP.

SamFromDowntown

They are changing the way the recognize revenue. They could be doing that for any number of reasons. To say that it is because of excessive returns is unfounded speculation.

Playbook007

Well they were planning this a while back. Thor said there would be losses 2nd quarter when the first quarter ended.

BlackBerry will survive in the Corporate and Government Sectors! My Z10 is so much better than an iphone!

jsocan

I think you're right, Jtaylor. I know several friends who recently bought refurbished Z10 at very low price.

RyanGermann

Use words like "I think..." or even "I speculate..." if you are speculating. Your words are written as fact. You aren't alone in this contemptible practice... I'd you like BGR you're in "good company".

Posted via CB10

jfunds

Still think it's poor business decisions made by blackberry that has caused this situation.

Shocking market poor PR relationship with end users.

If blackberry doesn't change the company will continue to head downwards

Posted via CB10

mobilesync

All the reason you list are right. But none is root cause.

DetritalGeo

Very happy they are streamlining devices... too many out there.

Posted via CB10

R Field

The executive team should cut their salary and take on more stock incentives in their contract. So far they haven't earned what they're getting paid.

CB10 - Z10 -10.2.0.1725

mobilesync

BB now needs someone like Alan Mulally, Ford CEO, who took over the reign when Ford was on the verge of bankrupt. He took one dollar annual salary and turned Ford to profitability - the only auto maker survived in U.S in this recession. He now is retiring from Ford in great honor and with big financial reward.

If TH stays hope he can learn from Mr. Mulally - a true hero.

Peter Lee4

3.7 million handsets is completely false, it is 5.9 million. This was a mistake and corrected afterwards.

jfunds

With such a critical announcement I donno how you get that figure wrong

Posted via CB10

SamFromDowntown

Substantiate that? I don't see the correction anywhere....

EOSummer

"The Company currently expects to report revenue for the second quarter of approximately $1.6 billion, of which approximately 50% is expected to be service revenue. For the second quarter, the Company expects to recognize hardware revenue on approximately 3.7 million BlackBerry smartphones. 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. During the second quarter, approximately 5.9 million BlackBerry smartphones were sold through to end customers, which included shipments made prior to the second quarter and which reduced the Company's inventory in channel." - http://crackberry.com/blackberry-announces-preliminary-second-quarter-fi...

So, no. From the company's sales standpoint, they have sold only 3.7 million handsets (to careers and resellers). It is the sales figure to the end users (consumers) that is 5.9 million.

JakeTheCat

Right. And it's the 5.9 million that are important. Inventory ramps up and down at carriers as products go through their life cycle but the real number to keep an eye on is how many phones are being bought by end users. That number was 5.9 million this quarter. They had ramped up putting Z10s into the pipeline in Q1 and in Q2 they put fewer into the pipeline but sold through some of what was there, reducing inventory.

theflew

The problem is sales to end users doesn't help BB since they already shipped the devices in the previous quarter (Q1) and those sales were recorded in Q1.

JakeTheCat

? Doesn't help them *look good for this quarter's headline*, perhaps, but sales to end users is really what counts, not the timing of when they teed up those sales.

Geeoff

This is a key point that I think Chris Umi missed as well.

Blackberry changed the way that they report sales. Instead of reporting shipments, they are now focussing on actual sales. This is a good idea, but this is a transition quarter so the numbers are tough to understand.

They actually sold 5.9million, which is not a complete disaster. But they are only going to record revenue from 3.7 million, because that is what they shipped.

Blackberry should really clarify this and provide some historical comparison figures.

k8bushlover

Yes, they should clarify, as none of these explanations seem to have got it quite right yet, I think.

They haven't told us how many units shipped this quarter. Only reported what they're recognizing as revenue this quarter (mostly BB7 devices), and what was sold through (presumably some of the latter already shipped and reported last quarter.)

Making it somewhat difficult to compare with last quarter.

jfunds

Carphone warehouse and phone4u have discontinued the Z10.

Why flood the market with phones with no marketing backing

Posted via CB10

Jtaylor1986

How can 40% of their employees be redundant though?

dporter6

There's only so much room on the lifeboats.

3Dee

Good comments from both Chris and Kevin. Perhaps a change in headline might be with considering though.

bvinceb

Chris how do you think this news and the drop in stock price affect its attractive for takeover or partnership

Posted via CB10

Playbook007

BlackBerry is dead. I will ride out the z10 as long as it works. Then I guess it is off to the buggy android as Apple can kiss my ass. I just can't understand how such a great device cannot gain traction. I can't believe how Heins built up the hype, released BB10 and then disappeared. It's like he works for Apple! I think it was an inside job by Apple! There is no other explanation! Fuck!

BlackBerry will survive in the Corporate and Government Sectors! My Z10 is so much better than an iphone!

Tyler Nellissen

Windows Phone has some nice offerings with a unique OS. I liked it when I had one before my Z10.

Playbook007

Windows 8 is so bad....i wish there was a choice. But corporately we are trapped. No to Windows phone for me.

BlackBerry will survive in the Corporate and Government Sectors! My Z10 is so much better than an iphone!

theflew

You must have missed "Windows Phone picks up all nine FIPS 140-2 certifications, clears path for government customers"

Playbook007

You must have missed "I hate windows ". I run a company.....Windows has been a money sucking drain every update, let alone OS changes. it also is vulnerable as hell. Windows 8 is exactly like the commercial. It's child like design is not what people who have to work need.

BlackBerry will survive in the Corporate and Government Sectors! My Z10 is so much better than an iphone!

jsocan

The pricing strategy and the much delayed upgrade of Android player hurt the excellent phones' chances.

icedkermit

Comparing BlackBerry to Facebook is ridiculous. Facebook doesn't design or build any hardware. BlackBerry does and incorporates best-in-class security technology. Would be better to compare them to Apple - excluding store employees.

cdobes

I agree. The fact that BlackBerry makes hardware automatically doubles the workforce. There are so many people involved - design, purchasing, quality, testing, and management to put it all together...comparisons to a software company are illogical.

Posted via CB10

mutigbeere

"approximately 5.9 million BlackBerry smartphones were sold through to end customers"

Sold phones was weak, but they seam to have cleared sell-through of 2 million phones a month (and an extra 2million phones sold from the previous quarter). Is this a funny accounting push of quoting better Q1 and Q3 sales and taking a bigger hit in Q2?

wiezel007

I was wondering about this.

jsocan

The extra two million phones were sold to end customers from the channel inventory, i.e. shipped from prior quarters.

TIMSHULL

Best wishes to all those at BlackBerry that will be affected by this,and thank you for hard work on what I think is the best device out there.

Lenin17301

An atom bomb could be dropped on Waterloo and Crackberry would still try to find a way to spin it into good news.

Tyler Nellissen

The timing couldn't be worse with BBM releasing this weekend. Just what you need is for people to have this sick feeling about your company right before you ask them to use your new product.

Playbook007

I will also add, why would you release this on the day BBM goes cross platform. I am telling you, Heins works for Apple. He is a traitor! He should be hung!

BlackBerry will survive in the Corporate and Government Sectors! My Z10 is so much better than an iphone!

NotGoodIMO

Heinz is an epitome of idiocy and the board is committing big crime by giving hige salaries to these idiots. They should all be put behind bars.

scienceboy

Leaner company. Niche market for their excellent hardware. Rebuild from there.

And.. use BBM to become cool again. If they can do these things they could become a major player again. It will, as suggested in the article, all about execution. Apple can produce excitement out of marginal incremental advances. Not because of the advances, but because of their marketing machine and their cool factor. This is the lesson BB needs to learn.

Playbook007

Amen!

BlackBerry will survive in the Corporate and Government Sectors! My Z10 is so much better than an iphone!

NotGoodIMO

For that to happen, they need to get rid of the current top management, starting with Heins. That guy has no charisma.

jsocan

After right sizing to match income, they get themselves more time to wait for more BB7 customers' contracts to run out and upgrade. My concern is how long does it take for them to start growing their customer base, profitability and share price. At this rate, they can easily be brought out to stop BB10 from being a threat to the competitions as it could have been.

BionicKris

With this news I imagine that many current owners of BB7 devices will seriously consider jumping to another platform. Would you commit for another two years without taking a good, long look at the other options? What will BlackBerry be like in 2 years?

I do love my Z10..

Posted via CB10

adonesc

The key word about these changes is that "it should " help the company become leaner and meaner. But it won't since the way I see it the problem remains at the top. A leadership with no vision, still stuck in the past and with a very blurry and uncertain idea of the future...

If this is a question of execution and efficiency them why not purge the bloated ranks of upper management up to and including Thorsten Heins Ketchup...and drastically cut his severance package also...$5 milion dollars would be more than generous and still more money most other rank and file BlackBerry employees who'll loose their jobs will ever see in their lifetimes.

And next time when you put out an article like this please spare me your fake "empathic link" with these folks who will be unemployed just in time for the holiday season!

On the pink slips it will read: From management to all BlackBerry serfs: Merry Fucking Christmas, Hanukkah or Kwanzaa! See you never...

Posted via CB10

NotGoodIMO

+1000000000000
Couldn't have put it better.

SamFromDowntown

Chris,

You say: "But the signs are bad, since BlackBerry only sold 3.7 million handsets in the quarter."

They are changing the way they recognize sales, so the 3.7mm unit figure should not be taken at face value. Effectively, some of the sales they recognized last quarter only got sold to end customers this quarter. It is a one time shift that makes this quarter look bad.

That said, as long as there is uncertainty surrounding the Company sales will be slow. --Sam.

ShaggyM8

I feel like Chris is being completely naive about this market analysis. He should consider that Palm went through this and it did not end well for them. BlackBerry is just repeating history. Don't get me wrong, I want BlackBerry to be at the level they were at 3 - 4 years ago, but with the smartphone market moving so fast, it is almost impossible to keep up at this point. I think this layoff news says it all about the future of BlackBerry... and it's not looking good.

BlackB_G

The job losses and $1B loss thing hurts but they gotta keep it moving. I feel for those regular workers that would have to take the hit no doubt. Best of luck in all ur endeavours. #keepmoving

Posted via CB10

ShaggyM8

Oh and why did Chris start talking about Facebook? That has nothing to do with BlackBerry and their situation currently. C'mon!

drmike

Chris as always has a great perspective on things. This is the process that needs to be followed if the company is going to survive.

BlackBerrys problem was it diverted from its original business focused device and tried to compete with a consumer device like the iPhone. It looks like they are going back to that which means they can focus on that segment. Let the consumer market go and be the business tool that BB has been in the past.

What they DO need to ensure is that this is the last hit of bad news. Get the pain out and hopefully some good news can come in the future.

Posted via CB10

jsocan

Problem is it's no longer a business vs consumer market. With BYOD and employees taking the device purchase decision from management or corporate IT, if BlackBerry cannot appeal to consumers, the hold on business customers can quickly evaporate. What's left for BlackBerry phones will only be those government and corporate departments that demand highest security. Let's hope their BES and BBM can take off with the multi-platform push so they can remain in business on the service side.

mobilesync

BYOD is a myth. It is dead in real corporations.

Playbook007

I agree. Corporations are finding out quickly that different devices don't work. It's so fragmented. I see so many huge companies still using legacy BlackBerry devices. They are not changing over to BB10. They don't care what the employee wants and I don't blame them. They put the device in the employees hands that works for the company. Guess what phone that is... one that doesn't run Angry Birds, Facebook, Twitter etc well. LEGACY DEVICE! ie more time to work.

BlackBerry will survive in the Corporate and Government Sectors! My Z10 is so much better than an iphone!

Blomsternisse

Real corporations? You do know that the there are far more small companies than there are huge monolithic ones. The small ones also employ more people and generate more revenue.

BYOD is here to stay. I'll never go back to company issued crap phones with strange policies (which makes the phone an object of hate).

mobilesync

For SMEs. The situation is this, some bosses want to please their employees (e.g. Yahoo's lame CEO want all employee to come to office so give them an iPhone). In these case, pleasure is No.1 priority, sure entertaining employees is a good strategy.

For other SMEs, bosses want to squeeze every second and also reduce cost, BB fits.

BYOD is a myth and the myth is bursting.

Blomsternisse

BlackBerry's dwindling sales says otherwise. Most companies use Microsoft EAS these days which is perfect for BYOD. Just set up the mail account on any decently up to date phone and it'll lock down the way the IT department wants it (device encryption, remote wiping, etc).

mobilesync

BlackBerry device sales had temporary drop, I agree with you.

But BES deployment and sales are increasing dramatically. Good that you mentioned ActiveSync. But do you know the reason why ActiveSync suddenly got more popular than it was before? You should know. The reason BlackBerry promote ActiveSync is because it actually doesn't affect BB's core business. None Microsoft shops cannot use it. I know this is not really a factor here since Exchange has killed IBM Domino and Google is far from corporate ready. The major reasons that ActiveSync are not good for mobiles are:

1) End users experience is bad. Microsoft meant it for mobile but it is not and will not be a mobile first architecture;
2) IT cost is high for big shops (don't mention small ones) because extra cost to secure ActiveSync.
3) Long deploy and configuration change cycles. Again this is with large shops. Forget small ones that can flip switch every second as long as it can entertain its employees. To put it in perspective, you can deploy a BES in two weeks starting from bare medal, at a top tier iBank for example, where you need 6 months to deploy ActiveSync. To make a change, you figure.

lagadu

Is this an American thing? I've never worked or even know anyone that works in a corp where everyone is forced into one device. We always get a list of phones to choose from which always includes 4-5 OSs and many brands.

mobilesync

You know what, BYOD is for some companies/people to profit. So, those companies promote. Ironically, when it comes to themselves, at least one, as I know, don't allow BYOD. That is an elephant by the way.

vgorous

Plus f'ing one!

You just wrote down my thoughts.

Posted via CB10

jic999

BlackBerry the niche player is being reborn and some will not be around to contribute but actually they have contributed in this rebirth of BlackBerry. BlackBerry 10 will be a leaner and meaner company because of the current and past employees. I wish you luck and Blackberry takecare of them properly !

Posted via CB10

wjptam

This is their capitulation from the smartphone market. They are conceding 3rd place to Microsoft. It remains to be seen if Microsoft can survive as a 3rd place player.

The smartphone platform war is over for Blackberry, and seems to be drawing to a close for the other three players as well.

Charles Poulsen

With BlackBerry needing to support BB10 more seriously than the older BBOS, I can see why these cuts are necessary. First, two different platforms and there is a chance that not all of the old teams could adapt to the new platform in a quick enough time frame. Second, they need to be more streamlined. Things like investing in some training to move away from waterfall to agile and other project management techniques will help them get a faster, more efficient development cycle. Third, and I think you nailed it here, they were too big. The days of free money have long gone and unfortunately it was probably time to start reevaluating everyone's roles.

Hopefully they didn't eliminate all the Indians and keep all the chiefs. I'd like to think that they have brought in some consultants of decent caliber and are in the midst of redesigning BlackBerry beyond the name change. Culture changes can have positive effects.

Next up... NEW PR FIRM. They NEED to market their gear better! I see Nokia, Samsung, Motorola and even Apple ads but the only thing I've seen is a BBM video ad. Their marketing needs work. Get the guys from Geico or something.

Playbook007

Geico commercials are good.

BlackBerry will survive in the Corporate and Government Sectors! My Z10 is so much better than an iphone!

eddy_berry

Kevin said it all. I really hate to see people lose their job. As a BB10 user I do want to see this company right itself and this is the harsh reality of business. Sucks.

oddboy

Change is hard. Changing directions is harder.

I'm still curious to see what BlackBerry evolves into over time. While they may not be much of a presence in smartphones, they will be around in the form of qnx for some time to come I think.

I just hope I'm able to get their future enterprise / prosumer oriented devices.

PK070205

I'm am truly really sorry about the horrific epic downfall of BlackBerry.

In attempt to help all those who lost their jobs, I put together some helpful resources.

http://www.apple.com/jobs/us/

http://www.google.com/about/jobs/

http://careers.microsoft.com/

http://www-03.ibm.com/employment/

A special thanks goes out to all those who inspired me to put these resources together.

Posted via CB10

xiaohuaxing

Wow... talk about tasteless

mobilesync

I don't think these companies will hire bozos.

fatkiid

There is a concept called a 10x engineer. Google and Facebook has them in spades. BlackBerry not so much.

Posted via CB10

fsecure

This is exactly where BlackBerry wants to go. You offer an incentive for a CEO to make more money from being bought out then running the show. Of course he will execute. The former CEO's knew that this downsizing was coming and cashed out.

The stock can even go lower if they wish but I don't think they want to make it that obvious.

Utimately they want to decrease the stock value so that it will be purchased and go private where many trade secrets can be kept i.e. warchests, sales figures, strategies, etc.

It this hyper-competitive market that they speak about they need any edge that they can get. Going private may be this edge that they require. I think this will be a trend that many technology companies will follow. Things are very cyclical and what was once old is now new again.

Some companies market their electronic products as if they were fashion accessories. Everyone knows that fashions will change frequently and what was once in today will be gone tomorrow.

BlackBerry never did promise that things would change right away. Like navigating a large ship, it takes time to change course. There is no doubt that they are currently in rough waters. Calmer seas will eventually prevail.

Posted via CB10

Playbook007

Dell just went private. That is what I think they are up to. In fact afterwards they might just partner with Dell. Something has been up for a long time...things don't add up. it's like BlackBerry is not even trying to sell bb10. The only thing consistent is they keep refining it, they keep pumping out great things like PlayBook Bridge, BBM cross platform, z30 and then purposely shitting on the good news. They want to drive the stock down.....plain and simple.

BlackBerry will survive in the Corporate and Government Sectors! My Z10 is so much better than an iphone!

dejanh

This is very interesting indeed. It really does seem like a concerted effort at manipulating the stock price.

Posted via CB10

mobilesync

Spot on. I smell a class action.

Playbook007

I don't think Heins is an idiot. I think he is out smarting everyone. He is using all tools at his disposal to prepare a solid device, get all the ducks in a row, while at the same time devalue the stock while looking as if they tried right to the end. He has all the media, blogs, BlackBerry haters helping him along. This company is going private on the backs of shareholders, then will rise rapidly as a private company. You watch.

BlackBerry will survive in the Corporate and Government Sectors! My Z10 is so much better than an iphone!

RyanGermann

I would just "like" this to indicate agreement but that feature is not yet available on blog comments ... but I like.

Posted via CB10

boi2012

Chris, I understand your point and agree that it was a good executive decision for the layoffs, but the title of this article, in particular the words, "you're happy" comes off a bit insensitive, although you do express later your sympathy for those laid off. The title along with your smiling picture, doesn't go over very well, though, I know what you mean. Maybe consider changing the title?

filmansantiago

Agree! Considering a title change here Chris?

If I am one of those who were laid off and I am reading this article, I'd be furious. :)

diegonei

I still want to know about the claims they will be leaving the consumer market.

Aren't prosumers just consumers in the end?

patdol

My thought exactly. Prosumer?
That term died long ago. This is the day of BYOD. If they honestly think their is a prosumer market the BlackBerry leadership should be ousted.

mbpstar

Seriously.. SAVE BlackBerry DOWNLOAD BBM!

mobilesync

1 positive thing: TH still have the conviction that it must be an enterprise oriented end to end business.

Two things I am concerned about:

1) The cut is not enough. It should reduce to 3000~4000. 7000 leaves too much room for B players who will turn A players into B

2) Some bad managers may use the opportunity let go excellent employees, which happened in recent cuts.

filmansantiago

As the song goes, "the first cut is the deepest", in my point of view, BlackBerry is getting near for the better. Because this cut now is the second and it's not that deep. The wound is going to be healed soon.

All the best to those who were laid off. Still, Keep Moving!

jh07

Same said for last layoffs

Posted via CB10

playpen007

When I saw the title of the article, I'm kind of sad why are you happy to see people get lay off, but until I fully read your article and I know why. I agreed with you for the company at this size should not employed more than 5,000 in my opinion.

mobilesync

-1000 = 4000. Then BB will be No.1 again.

GULCer

Chris, quite surprised at this article from you. Let's be real, this is the end.

Crackberrykills

"This is the end. My only friend, the end." I wish people would stop saying. Morrison and the Doors pop in my head automatically, and gets stuck in there for weeks. Please find another phrase. Thanks.

trwrt

Weird scenes inside the gold mine... That would be a good title for a history of BlackBerry, come to think of it.

jr4941

Great post.

I *still* don't get how they can STILL be selling so many OS7 devices?!? WTF??

RyanGermann

Because mgmt effed up and didn't design a "transitional" device at lower cost with optional BBOS interaction: if BBOS users have to abandon the hardware form factor of BBOS and forget what they know about using the OS, and can't afford a $700US device, what options are left to BBOS users but to consider a low-end windows phone or Android device.

Posted via CB10

sfshoeguy

Nobody likes layoffs especially when you've had dedicated employees working so hard to save their company. I'm relatively new to BlackBerry as I switched from an iPhone 4 to a Bold 9930 2 years ago and just recently upgraded to a Q10. I am alone among my friends and business colleagues with a BlackBerry 10 device. IMHO two things that BlackBerry has to do and do it with lightning speed is : 1) Undertake a marketing campaign in the U.S. that will not only highlight the functionality of BB10 but will make BlackBerry an aspirational brand again. When I show my friends some of the features of my Q10 like the HUB their first comment is I didn't know that. Why? A lack of a compelling marketing campaign here. Secondly and just as importantly is to bring the ecosystem up to the competitions standards. HERE'S hoping that Thorsten and his team can pull this off, everyone loves a comeback c'mon BlackBerry let's show them a comeback for the ages.

martinjdub

Sadness.

Posted via CB10

Crackberrykills

Yeah. BlackBerry is dead. Yeah.

mobilesync

To folks who don't believe this cut is a good sign here is some solid numbers.

At RIM's peak time, that was when its business started the exponential growth:

BES team: about 10 people
Relay (NOC): about 10 people
MDS: 4
RIM JDE (developer tool): 2
Browser: 2
I don't know about hardware part.

This is why I say 3000~4000 are enough.

From there on the company bloated but still carried the momentum until 2008 after the financial crash, Mike said "we are still hiring" and scooped 2000 as he said that. From there on the hiring practice of RIM went out of control. Too many bozos, from top to bottom.

Time to purge B players. This must done top-down, otherwise, bad managers let go excellent employees.

jh07

They weren't really competing with the IPhone or Android, Genius

Posted via CB10

mobilesync

We were competing against Microsoft windows CE and Palm. Both were more popular than BB at one time. But we nailed them because we had only 2000 people.

Bsbudd

This was before they had serious competition. We are living in 2013 with Apple, Samsung and in a distant third Microsoft/Nokia dominating the market.

mobilesync

We were competing against Microsoft windows CE and Palm. Both were more popular than BB at one time. But we nailed them because we had only 2000 people.

BB10Funding

When will the board resign...

Kevin Clough

It would be nice if BB10 was selling better, but overall I think this increases BB's long-term viability. They needed to get smaller so that they can be profitable. This could also be the pre-cursor to them being bought which I am still holding out hope for.

mobilesync

Yes, return to profitability is No.1 priority. Reducing head count can also boost product efficiency and product quality. So good news. The bad news is they are not cutting enough. The right head count should be below 4000.

Playbook007

Also a profit next quarter would show signs of a comeback. Profit might show based on cuts not so much on sales....

BlackBerry will survive in the Corporate and Government Sectors! My Z10 is so much better than an iphone!

allsportsfan

It is too bad for all those employees to lose their jobs and I hope that they will be able to find work to replace what they had at BB. Chris has already said it, this decision is not because it was in the grand plan, it is always reactionary to how your consumers react to buying/not buying your products. The soldiers always take the hit for the failed grand plans and this is what has happened here.

I still hope that BB can make it as a niche company and regain glory in some way.....what is missed in a lot of discussions by people who want BB to go away is that they are a major supporter of high tech in Canada through their investments and their tech funds. As a tech person why would anyone want that to go away. Some of the Apple app technology has been developed from BB tech funding.

I've said it but don't expect Thorsten to be around after the cuts are done, they will need new leadership to take them to the promised land. It happens in other companies and BB will be the same once the cuts are done you need new quarterbacks to lead the play, something I'm not confident based on what THeins has done will make him that one.

mobilesync

I thought TH should go. But then changed mind.

1) He seems has the conviction and resolve to keep BB as end to end. which is the key of BB
2) He finally has the guts to cut. But he is not cutting enough. If he can cut it to 4000, he should definitely stay.

As for those marketing mistakes he made recently, like to "tens of millions ..." tongue slip, are tuition paid. This is his first CEO job. Anyone makes mistake. I believe he learns fast.

Xopher

Now that the layoffs are made, and the company has downsized, will they be ready to actually move forward and start rebuilding the company? That's my question. I feel for the people losing their jobs today. For the sake of the company, a new direction needs to be made, and they need to show that they really do want the company to survive.

Marketing. PR. Mission statement. You can't turn the company around without saying something. Those who still have their jobs need to know there is something still worth working for, and the rest of the people who are associated with BlackBerry (sales, developers, businesses, governments) need to know it as well.

xiaohuaxing

Thanks for the perspective. I had a general knowledge that they had over 10k employees but I had no idea facebook only had around 5k, or less than half of BB. Granted BlackBerry needs hardware people and Facebook in general doesn't. But with only new 4 phones in the portfolio (huge disappointment to me), 7600 sounds solid. 50% expense savings is incredible.

mobilesync

No, 7600 still too much. It is not just cost issue. It is about purging bozos. They business they are doing can be done by 300~4000, if you get 7600 to do it you inevitably hire bozos who will turn all into bozos.

BBrickk

They say desperate times require desperate measures. I hope that's the last storm that BlackBerry has to deal with. I have faith that if you stay true to your roots, good will eventually come your way.

Posted via Z10 STL100-3 using CB10. Fido, Toronto.

Chiitown_Kruger

I used to love bb the pearl, tour, 9900
Really sad bb will be over soon

BBrickk

I wouldn't bet on that! I can see many well-established companies and organisations digging to save BlackBerry. The circle of trust they've created with such potentials will eventually pay off.

Posted via Z10 STL100-3 using CB10. Fido, Toronto.

buckwylder

It's something that is inevitable and I knew it was happening. BlackBerry didn't hide this information and they're just sharing their restructuring initiatives because they're still in transition. It was always made very clear that "the next few quarters" will be announcing losses - about two quarters ago. They're clearly, as said, are focusing on their strengths in enterprise and no longer catering to an immature consumer market. Let iPhone sell "douche bag approved" devices, BlackBerry is niche and wants to be successful in where they're strong. good. Get rid of the old fatty weight that is no longer needed, they'll get pay outs and whatnot.

Posted via CB10

Tumacana

First and foremost I'd like to wish the staff getting laid-off at Blackberry the best of luck. Im sure they worked hard to bring BB10 to market. I'm hoping that along with those lay-offs the marketing chief is going along with them. There's no room for him at the new Blackberry. I know BBM is going to make waves and has a good chance at becoming THE cross-platform messaging app of choice. If I have any advice for Blackberry is that they better bring video chat and screenshare (if possible...I dont know that IOS would allow that capibility) to the cross-platform app ASAP. I will still remain a Blackberry fan forever and will use BBM and force my friends to use it if they want to continue communicating with me. Never thought I'd be saying this but unfortunatly I'll be doing my BBM'ing from an IOS device.

PK070205

I just wanted to keep everyone posted on the latest news. Wow, sit back and watch the fireworks!

Unsold phones could mean writedown for BlackBerry

By: Nestor E. Arellano

Unsold smart phones amounting to nearly $1 billion could prompt BlackBerry Ltd. to declare a major writedown when the company posts its earning next Friday, according to industry analysts.

According to BlackBerry its inventory of unsold smart phones has grown by 47 per cent in the June quarter. The figure raises the company’s inventory to $887 million.

“The presence of a bulging inventory adds another wrinkle on the plans of BlackBerry to turn around its fortunes and will certainly impact a potential sale of the company,” said Carmi Levy, Toronto-based independent technology analyst.

A writedown will reduce net income...

Read more: http://www.itworldcanada.com/post/unsold-phones-could-mean-writedown-for...
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Crackberrykills

So, if BlackBerry is dead, it is dead. However, we would not actually know that at this point in time. Hence, any pronouncement of such is ludicrous. Just relax. Enjoy your device. If it is not what you want, get something else. Pretty damn simple. I have stated this before, but as long as BlackBerry has something for me to buy, I will buy. If not, I will just buy something else. Again, pretty simple stuff.

PK070205

And in the mean time just don't buy anything BlackBerry because she's sicking faster than the titanic!

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desimerollin

I really wanted to start a forum thread on this since I couldn't find one. But since I'm not at my computer, here goes....

I would like express my deepest thanks and appreciation to all those hard working men and women at BlackBerry. Building an OS from ground up is no joke, especially with the time frame the worked with. You guys delivered a superb and quality product which I and millions of other users enjoy daily on our BB10 devices. I remember this every time my z10 helps mr keep moving.

I wish all of you the very best for your future success! I hope you will continue to dream and innovate, and change the way we use our technology...

Cheers!

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TioPepe78

It will get better, my best hopes for the people that leave the company, you guys did a great job, BB10 is the most amazing OS don't let anyone convince you otherwise.

I will keep supporting Blackberry, I will get the Z30, and hope the guys that leave now find their way to keep growing in other pastures.

Playbook007

Great. I will get my z30 for basically free. Just like my 4 playbooks for 100 bucks. Life just got better.

BlackBerry will survive in the Corporate and Government Sectors! My Z10 is so much better than an iphone!

onethreealpha

Only someone who's head isn't on the chopping block would ever say they were happy to hear about job cuts.

freddysrevng3

A real "A Hole" statement to be sure....People lost jobs because the "Golden Shower Parachute Orgy" band of executives screwed this up so badly - that people lost their jobs at BlackBerry.

There is no reason, whatsoever, that this BB10 operating system should not be more popular - NONE.

It is better than iOS and Android.

Period. Full Stop.

MozThaGreat

Good luck to everyone hit by this news.

At the very end of the day what I'm most upset about is how us consumers allowed App Developers to single handedly kill such a big company. I know thats a weird way to put it but its true. And we cant dismiss the fact how BB released device after device that was so flawed. Everything from the Storm 1 to the Style to the Torch 1 to the DOA Playbook. Execution from BB was just never existent. What a ride we had Crackberry. RIP.

freddysrevng3

What's interesting is that when BlackBerry goes away - CrackBerry will be dead, as well.... Maybe a few "layoffs" here will give these guys a "better perspective"..

MozThaGreat

I really hope you're right but I'm not optimistic about anything BB does anymore. IDK why the Z30 exists, updates for BB10 aren't coming out fast enough in my opinion, cross platform BBM is cool but it doesn't offer anything new. BBM CP should be launching with voice AND video. But oh well, what can we do at this point.

rlaracue

Prosumer = top of the line specs and build quality. It also usually means expensive. It does mean longer upgrade cycles so they won't be changing processors or screens every 8mos. But it does NOT mean mid tier specs (see Z30) in a flagship phone. See prosumer audio equipment as an example. Go into any boutique audio video store and you wont find middling specs or build quality there nor shoppers looking for same.

Enterprise means back office/server stuff and security with less allegiance to BBOS devices long term. If you know your device base is about to get steamrolled you don't limit your server biz to that device line.

The new BB will need to be better (less expensive or parity) at managing IOS, Android and Windows smartphones than any other vendor out there if this business is to survive.

So BES and MDM in the enterprise with a focus BYOD excellence with govt grade security. Perhaps after they get purchased they will try to buy one of the dominant MDM vendors and merge tech so they can support BYOD.

My personal guess is IBM or Cisco would be interested in a prosumer/enterprise focused BB. Lenovo too but even at $6-8/shr it would be a merger and cash would be hard to come by for future acquisitions. HP would have been interesting before the BB plunge and Palm debacle but those ships have sailed.

Prosumer/enterprise likely means no Sony, LG, Amazon, etc as buyers.

mobilesync

Agree a lot points you made here but disagree "So BES and MDM in the enterprise with a focus BYOD excellence with govt grade security. Perhaps after they get purchased they will try to buy one of the dominant MDM vendors and merge tech so they can support BYOD."

All other MDMs are garbage. BB is still 5 years ahead in this area. What to buy? for what. What others have but BB doesn't? Nothing. Even for iOS and Android, BES's capability is 5 years ahead.

rlaracue

You may think they are garbage but most firms w/o BB are not giving BES much of a look. You are buying market share and taking out a competitor.

Also from what most analysts have said in reviews BES10 has "ok" mgt of non BB devices not best in class or the most affordable.

BES 10 managing BB 10 devices may meet your 5 yrs ahead idea but BES10 managing IOS or Android is just another MDM offering to most IT Mgrs.

mobilesync

Name them, I can tell you one by one.

mobilesync

Please don't quote the so called magic quadrant. That makes me lough. If you do, check back the history. See how much the magic matched the reality. Funny.

nabil114

Now, they have time to improve sales. They should move to their production strategy. (JIT) Market is reacting to the write-down of inventory.

blackburberry

Stop the presses! This is where Alicia Keys and Frank Boulben's Berry Band of Luminaries step in to assist with the brand rebuilding.

My heart goes out to those that lost their jobs. I hope they get some exit compensation for their hard work and dedication.

Kevmobile

While I appreciate people's disappointments, frustrations and worries about what's been going on with BlackBerry - I and my family own BlackBerry products and I have a significant (for me) investment in shares - my greatest frustration has been for awhile and still is the image of the many self-declared BlackBerry fans/supporters/championers/evangelists who speak so ill of the BlackBerry organization on this site uttering those same ill thoughts out loud to others. If they do, they can share in the responsibility for lack of sales.

blackburberry

False. BlackBerry is the author of it's own fate. Positive or Negative.

Kevmobile

To blackburberry: expanding on your metaphor, Blackberry is the author, consumers are the "book" reviewers. People pay attention to reviewers and avoid poorly reviewed books without reading the book and making up their own minds and will even repeat the review as if the reviewers opinion was fact.

freddysrevng3

@ Kevmobile....you didn't answer my question about if you "are from Canada"... Nevermind.. Dear friend, people on this board are some of the most loyal BlackBerry fans on the planet - that's why they are here. These people who have bought BlackBerry devices and bought stock in this company have been "financially raped" again for the second time in less than 3 months - if they are unable to "sugar coat it" today - it is understandable...

Thank goodness Frank and Thor and Kristian will make millions... that's what this company has devolved to...

freddysrevng3

You are from Canada, right?

Kevmobile

Yes, Canadian. But my identity of significance here is that BlackBerry champion. Ift hey crash, they crash. But I don't think declared fans/champions should be helping push them to the edge.

freddysrevng3

So we should sit idly bye while our stock positions in BlackBerry have been decimated, again, by the incompetency of this management team who should have been removed by the complicit board of directors a long time ago so that we could have been "BlackBerry Champions" sans the "double financial raping in the past 3 months"... you mean like that my Friend from the North?

freddysrevng3

Apparently, BlackBerry deserves to go the way of Palm... and Canada deserves to be "disgraced" again - by the failure of another of its "Once Great Companies"....

Maybe the CrackBerry Team can open a "CrackMapleLeafs" site or some other type of BS.... They have always been Fanboys, anyway, - easy transition - way fewer viewers.....

jh07

Were not f ing BlackBerry cult followers, we're users of blackberry products. If we see the company doing something wrong, we state it. We don't sugar coat sh#t like crackberry. You might want to live in a fantasy land, but we choose not to. We don't make business decisions for blackberry. They screwed up!

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Kevmobile

To be clear, I'm not expressing concern about people declaring their opinions on CrackBerry. That's the great thing about sites like this. I said my concern was the image of commenters declaring their doomsday and BlackBerry -hating remarks out loud, to potential buyers. Swaying potential buyers away, like carriers do, is not helpful. If there were more buyers, we would all have that much less to be concerned about. As everyone else is, I'm simply sharing my thoughts and opinions. Chill, people.

bbq10l

People should speak the truth. I'm not lying for BlackBerry - they are the author of their own demise. The one prevailing theme on these sites is it is the consumers' fault BlackBerry is failing- that is why they are failing. It's their own fault. Period.

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Poirots Progeny

Such a shame this has happened to BlackBerry. Though, as said above, BlackBerry's decline is due to the decisions they made. Hubris.

Best of luck to all those that are departing.

Posted via CB10 on my BlackBerry Q10

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