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September 23, 2013

4,500 Employees Jobless as BlackBerry Tallies Losses

The news is terrible coming out of BlackBerry, as a litany of losses, sluggish sales and other woes contributed to the greatest lump of bad news of all: 4,500 BlackBerry employees to lose jobs by the end of the year. This is a huge blow to BlackBerry—as well as its employees—and it all comes down to the same thing: the numbers.

Given that BlackBerry's total headcount, back in March of this year, was around 12,700 people according to reports, that means about 35 to 40 percent of the workforce will be spending 2014 employed elsewhere. At least a chunk of this can be attributed to the massive losses the company has recently endured; some reports indicate an operating loss between $950 million and $995 million, mostly due to lackluster sales on the BlackBerry Z10 device. That's part of a larger story dragging down quarterly revenues as well, and in general making for the kind of environment where saving cash looks better than keeping employees.

But that in itself has prompted others to look at the wider picture, including Microsoft's recent acquisition of Nokia. If BlackBerry does as was last reported and pulls out of the consumer market to focus on the enterprise market, that gives Microsoft a new chance at getting a fresh slice of consumer market. Of course, BlackBerry's share of the consumer market wasn't all that substantial to begin with, many note, but an extra slice—even a small slice—is an extra slice.

However, some have also noted that BlackBerry's exit of the consumer market may be related to one of two key points, especially given the timing in which the news hit. It's almost October, and that means that the Christmas shopping season is likely to get fired up, in earnest, before too much longer has passed. But BlackBerry already largely missed out on the last shopping season with BlackBerry 10. Now BlackBerry plans to miss out on a second one, leading some to wonder if maybe BlackBerry has managed to find a buyer after all, and is trimming up before said buyer publicly takes note. That's the potential upside; a buyer for BlackBerry means fresh cash in the system, no doubt necessary. A second, darker proposition suggests instead that BlackBerry may be pulling out because no amount of good sales can fix its problems; if even the best-case scenario still leads to losses, why stage a season at all?

But who would buy? Certainly, major phone makers like HTC, LG and Samsung might be in play for such a deal, and it's hard to count out Google or even Microsoft, who may want a better shot at getting Windows Phone devices into the hands of current BlackBerry users. Some have even contemplated that Yahoo may take a run at things just for the sake of having a valuable bargaining chip for later projects, especially possible given Yahoo CEO Marissa Mayer's recent buying spree.

While only time will tell just what direction ultimately comes out of BlackBerry's plans, there are certainly possibilities enough to go around. There's ample potential for a reshaping of the overall market, and hopefully, new openings enough made for the 4,500 employees BlackBerry has lost to find new jobs when the current ones dry up at BlackBerry.




Edited by Alisen Downey


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