BlackBerry has decided to downsize almost 40% of its global workforce i.e. 4500 layoffs and take an inventory write-down of $960 million with an expected net operating loss of upto $995 million in second quarter of fiscal year 2014. The company faces dire straits ahead.
A struggle for survival is going on at BlackBerry. Over 4500 employees will be laid off. As for the sales for the quarterly period, they missed the analyst’s estimates by at least one half. This is disappointing news for BlackBerry indeed. Losses amounting to $995 million have crippled the firm’s infrastructure.
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Blackberry expects to report approximately $1.6 billion sales revenue for Q2 2014. Compare this with the $3.03 billion that were estimated and you get a pretty good idea by how much of a margin the goal was missed. At this stage BlackBerry has admitted to the fact that it can’t hold a candle up to Apple’s iPhones or Google’s Android gadgets. Since its devices are not being picked off the store shelves, it is facing a tragic downward spiral.
The incoming revenue this season is the lowest since the figures six years ago. Way back then the iPhone and Android were both in their nascent phases. And BlackBerry was king. Meanwhile, the Z10 turned out to be a failure too. Many companies that owned shares in BlackBerry started selling them and Morgan Stanley backed off from upgrading to a new platform.
Its new Z30 had been slated to turn BlackBerry’s luck around but that didn’t happen either. It seems that the dark clouds of gloom have gathered around the enterprise and are refusing to go away. Whether they have a silver lining or not is something which only the future times can tell.
Thorsten Heins, President and CEO of BlackBerry said, “We are implementing the difficult, but necessary operational changes announced today to address our position in a maturing and more competitive industry, and to drive the company toward profitability. Going forward, we plan to refocus our offering on our end-to-end solution of hardware, software and services for enterprises and the productive, professional end user. This puts us squarely on target with the customers that helped build BlackBerry into the leading brand today for enterprise security, manageability and reliability.”