Blackberry sacks 40% of its staff and stops marketing direct to consumers
With $1bn in unsold phones, Blackberry is no longer going to market to consumers. Instead it will concentrate on corporate and professional customers, the Wall Street Journal reported last night. The company will also lay off 4,500 employees, or 40 per cent of its global workforce.
Blackberry: new models don't capture the customers
The Canadian company reported a nearly $1bn second-quarter loss in a surprise early release of earnings results. Sales were expected to be $1.6bn instead of the $3bn expected by analysts.
Shares were halted in New York pending the news, then the stock dropped 19 percent to $8.50 after reopening for trading.
Blackberry had been scheduled to release earnings next week. Its new models have totally failed to make the big impact hoped for in the market and late on Friday the company said it expects a loss of about $950m to $995m for the quarter, including a massive inventory charge (ie unsold phones) due to increasing market competition.
Commentators at first speculated on a further loss of sales as possible customers would be wondering about their two-year contracts. Then it emerged that Blackberry's position is so dire that it will no longer market its phones to consumers - despite launching four phones this year. Instead it will concentrate on the corporate customers who have historically made up the core of its subscriber base.
Even with this year's new lineup of phones, Blackberry said most of the phones sold in the latest quarter were legacy models from earlier years.
The Blackberry, pioneered in 1999, was the dominant smartphone for on-the-go business people and other customers before Apple launched the iPhone in 2007. Since then, Blackberry Ltd. has been hammered by competition from the iPhone as well as Android-based rivals like Samsung.
With shares at $8.72 last night, the company's a stock-market value is under $5 billion, down from more than $80bn in 2008, said the WSJ.