WSJ: BlackBerry To Cut Workforce By Up To 40%
(RTTNews.com) - Struggling smartphone maker BlackBerry Ltd. (BBRY, BB.TO) is preparing to cut up to 40 percent of its workforce by the end of 2013, the Wall Street Journal reported Wednesday, citing people familiar with the matter.
BlackBerry's reported plan to cut jobs comes even as the Ontario-based company announced the launch of a new smartphone earlier in the day, as part of its efforts to regain market share in the highly-competitive smartphone market.
According to the WSJ report, the layoffs will be across all departments of BlackBerry and occur in waves. The job cuts are said to be part of the company's efforts to cut costs and shrink operations as it has lost market share to rivals such as Apple Inc. (AAPL) and Samsung Electronics Co. (SSNLF.PK). As of March 2013, BlackBerry had 12,700 employees.
In August, BlackBerry said its board of directors formed a special committee to explore strategic alternatives to enhance value and also increase scale to accelerate deployment of BlackBerry 10. The strategic alternatives include a sale of the company, possible joint ventures, strategic partnerships or alliances, or other transactions.
Earlier in September, the WSJ reported that BlackBerry plans to run a "fast auction process" that would result in a sale of the company by November. The push to find a buyer for BlackBerry came after Microsoft Corp. (MSFT) agreed to buy the handset unit of Nokia Corp. (NOK) for $7.2 billion. Microsoft was seen as a potential buyer of BlackBerry. In addition, the Microsoft-Nokia deal could add pressure on BlackBerry's sales.
BlackBerry, once a leader in the smartphone segment, fell into hard times after Apple Inc.'s (AAPL) iPhones and devices running on Google Inc.'s (GOOG) Android platform began to dominate the market.
Meanwhile, the sales of two LTE-enabled smartphones introduced by BlackBerry earlier this year - the all-touch screen Z10 and keyboard equipped Q10 - have reportedly fallen below expectations.
In late June, BlackBerry reported a loss for the first quarter that narrowed from the prior year, helped by higher revenues and improved margins. Net loss for the first quarter narrowed to $84 million or $0.16 per share from $518 million or $0.99 per share in the previous year. Revenues for the quarter grew 9 percent to $3.07 billion from $2.81 billion in the same period last year.
Earlier on Wednesday, BlackBerry introduced the new BlackBerry Z30 smartphone. The new smartphone comes with a 5-inch touch screen and the largest battery ever built into a BlackBerry smartphone. It features BlackBerry 10 OS version 10.2 and a 1.7 GHz processor with quadcore graphics.
The Z30 will roll out from select carriers and retailers around the world, beginning next week in the UK and Middle East, and all other regions going into the holiday season.
BlackBerry also said that its messaging service BlackBerry Messenger or BBM will be available as a free download for rival Android smartphones running Ice Cream Sandwich and Jelly Bean, beginning on September 21. BBM for iPhones running iOS 6 and iOS 7 will become available on September 22.
BBRY closed Wednesday's regular trading session at $10.40, down $0.16 or 1.47 percent on a volume of 21.03 million shares.
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