Report: BlackBerry Slashing Workforce Up to 40%

By - Source: The Wall Street Journal

The Wall Street Journal reports that BlackBerry Ltd, formerly RIM, is gearing up to eliminate up to 40 percent of its workforce by the end of the year. The news arrives by way of unnamed sources who claim that the struggling smartphone maker, which once ruled the mobile market before the first Apple iPhone arrived, will cut staff across all departments in waves.

The Canada-based company reportedly had 12,700 employees as of March 2013, the last time it disclosed a total number. Two years ago, BlackBerry employed more than 17,000 individuals, and still retained 14 percent of the U.S. smartphone market. Now BlackBerry commands less than 3 percent despite recent efforts to gain new ground with the launch of its new BlackBerry 10 platform, the Z10 and Q10 phones.  

A BlackBerry spokesman told the paper on Thursday that "organizational moves will continue to occur to ensure we have the right people in the right roles to drive new opportunities in mobile computing." Layoffs actually began last year with a cut of 5,000 jobs, and came again this summer, mostly in the R&D and sales divisions. Many current employees already know that their jobs are on the cutting block, sources said.

BlackBerry's fiscal year ending March 2, 2013 saw a 40 percent drop from the year before, reporting $11.1 billion compared to the previous year's $18.4 billion. The company's GAAP net loss was $628 million compared to the previous year's GAAP net income of $1.2 billion (pdf). The following quarter, fiscal Q1 2014, revealed an $84 million loss and for million less subscribers (pdf).

Since late last year, talk of BlackBerry selling out to another company has been on the table as one option to boost revenue. However sources said back in August that discussions about going private began to heat up on the company's board. By taking the company out of the public eye, BlackBerry may have enough breathing room to fix its problems, similar to what Dell is doing. Unfortunately, with bleeding subscribers and continued losses, investors may look the other way.

But BlackBerry is still putting up a good fight. The company just announced the Z30 smartphone with a 5 inch display, and the new BlackBerry 10.2 OS. The phone is expected to 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 10 OS version 10.2 is expected to be available for the BlackBerry Z10, BlackBerry Q10 and BlackBerry Q5 smartphones beginning mid-October.

The company also announced the release of BBM for Android on September 21, and BBM for iPhone on September 22. Previously exclusive to BlackBerry, users can now chat across all three platforms, share files such a photos and voice notes, and perform group chats with up to 30 people via BBM Groups. Every BBM user has a unique PIN that maintains their privacy, the company claims, so users don't have to give out a phone number or email address to a new or casual contact. Voice chat and video calling should arrive soon.

"We are not talking about dates, but we are committed to do it soon," said BlackBerry's Tyson Verstraete. "We are committed to make BBM have parity across the different operating systems. We are committed to that, it’s just going to take some time to get there."

BlackBerry certainly seems committed, even if it means trimming 40 percent of its workforce, going private, or both.

Kevin Parrish is a contributing editor and writer for Tom's Hardware,Tom's Games and Tom's Guide. He's also a graphic artist, CAD operator and network administrator.

See here for all of Kevin's Tom's IT Pro articles.

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