Monday, 23 September 2013

Blackberry Cuts 40% Of Workforce, Braces For Takeover

Over the last weekend, Canadian smartphone maker Blackberry (formerly Research In Motion) announced that it was cutting 40% of its workforce and suspending consumer phone sales due to severe financial difficulties.

The company is expected to have lost $995million in it's 2nd quarter financial results. With the announcement of 4500 jobs being cut, the share price dropped by 17% to a record low for the firm.

Blackberry's chief executive Thorsten Heins released a statement on Friday saying: "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."

Blackberry have been struggling every since competition from the iPhone and Android eroded their enterprise market. Previously, Blackberry's BES service was considered the defacto enterprise email service. However, as soon as iOS and Android began to incorporate secure Exchange email services, Blackberry's market share began to dip.

Blackberry tried to reinvigorate its fortunes with Blackberry 10, a new, eye catching and easy to use operating system bundled with the Z10 and Q10 handsets. However, spiralling costs and massive delays cost the company massively, with less than 6 million of the units sold since their release in January 2013. Considering after 3 days on sale, Apple had sold 9 million iPhone 5S units, it's an unmitigated failure for a device that had the future of a whole company on its shoulders.

The company is primed for takeover with Fairfax Financial, a corporate holdings company, pitching $4.7billion for the beleaguered firm. This values each share at around $9 each, wiping billions off the value of the company at it's peak.

Blackberry also announced that they were pulling their planned Blackberry Messenger app for iOS and Android devices. Once the "must have" part of teenage life, Blackberry Messenger has seen massive declines in user figures as users migrate to free alternatives such as WhatsApp or Snapchat.


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