Things are not getting any better at BlackBerry. It lost close to US$1 billion in the last quarter, with an “increasingly competitive business environment impacting BlackBerry smartphone volumes.”
It also confirmed reports that it would lay off 40% of its workforce. “The company is targeting an approximate 50% reduction in operating expenditures by the end of the first quarter of fiscal 2015. As part of this, BlackBerry will implement a workforce reduction of approximately 4,500 positions or approximately 40% of the company’s global workforce, resulting in a total workforce of approximately 7,000 full-time global employees.”
BlackBerry said in a preliminary financial statement that it expects to report revenue for the second quarter of approximately US$1.6 billion, with sales of approximately 3.7 million smartphones. Problem is, most of them are BlackBerry 7 devices, “in part because certain BlackBerry 10 devices that were shipped in the quarter will not be recognised 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.” In other words, it has shipped plenty of Z10s and Q10s to resellers, but not many people are buying them.
BlackBerry’s shares plummeted on the news. The announcements had been widely expected, but their confirmation was no comfort. Shares on NASDAQ were trading at $10.27 before the announcement, and immediately dropped to $8.02, nearly as low as they fell late last year before the announcement of the Z10. They recovered to close at $8.72, but it was a high turnover bloodbath as institutional investors gave up on the stock.
BlackBerry also shuffled smartphones on its Titanic deck, announcing plans to “transition its future smartphone portfolio from six devices to four. The portfolio will focus on enterprise and prosumer-centric targeted devices, including 2 high-end devices and 2 entry-level devices in all-touch and QWERTY models.
“We will re-tier the BlackBerry Z10 smartphone to make it available to a broader, entry-level audience. Our enterprise business continues to reflect the trust that governments and businesses have placed in the BlackBerry platform,” said CEO Thorsten Heins.
“Security matters, and enterprises know the gold standard in enterprise mobility is BlackBerry.” Do they?