BlackBerry to cut its Workforce by 40% after Immense Loss

From an internal memo to employees by Reuters, it had been concluded that BlackBerry has lay off 4,500 employees which is nearly40% of its already reduced workforce over the last three years in an attempt to reinvent itself. It has clinched a lingering and painful restructuring process and is looking to begin with a modest growth.

The memo from BlackBerry’s Chief Executive John Chen said, “We have completed the restructuring notification process, and the workforce reduction that began three years ago is now behind us.”

“More importantly, barring any unexpected downturns in the market, we will be adding headcount in certain areas such as product development, sales and customer service, beginning in modest numbers,” added Chen thanking those people who have stayed with the company through the process.

The company also reported that it had a quarterly loss of nearly $1 billion which is mainly due to the result of unsold BlackBerry phones and the payments to stop manufacturers and suppliers from adding to the pile. The company had expectation of $1.6 billion revenue in its second quarter and almost half of the $3 billion analysts had anticipated it. But the sales of the phone were only 3.7 millionwhereas at the same time, Applehad 31.2 million iPhones sale during its last quarter.

Some of the analysts and investors said that the company’s day as smartphone maker is effectively over since the loss has been so huge. And maybe it’s true because now the company will begin hiring in other key areas of product management, sales and customer service rather than selling BlackBerry phone only as said by Chen.

BlackBerry which was once a hero in the market of smartphone in its infancy now is dramatically being eroded over last threeyears whereas Apple’s iPhone along with Google Inc’s Android operating system are in great highlights with more sales.

Chen, who is well known for having turned around enterprise software maker Sybase Inc in the late 1990s, took the reins at BlackBerry around eight months ago and has been rapidly taking action to stabilize the company via selling non-core assets, partnering with other companies for making the manufacturing and supply chain more efficient. He also said in the memo that he is confident BlackBerry now has the right organization and team in a place to execute its business strategy. He said there was “no margin for error to complete BlackBerry’s turnaround to success” and told the employees to stay focused.