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WSJ: BlackBerry set to cut workforce by up to 40%

  • The WSJ  reports BlackBerry (BBRY -0.6%) is "preparing to make deep staff cuts by the end of the year via layoffs that could cost up to 40% of its employees their jobs." The paper adds the job cuts "will cut across all departments and will occur in waves, likely affecting several thousand employees."
  • BlackBerry has already been trimming headcount as it evaluates M&A options and contends with weaker-than-expected BB10 hardware sales. However, there hadn't been any indications to this point of layoffs on the scale suggested by the WSJ.
  • Director/former Sony Ericsson chief Bert Nordberg recently asserted BlackBerry can survive as a "niche company."
  • BlackBerry had 12.7K employees as of March, and over 17K two years ago. FQ2 results arrive on Sep. 27.
  • Separately, BlackBerry has announced a BBM Android app will launch on Saturday, and a BBM iPhone app on Sunday.
  • Earlier: BlackBerry launches Z30 (formerly the A10)
Comments (57)
  • ciolan
    , contributor
    Comments (193) | Send Message
     
    We're back in the green. Move along, nothing to see..
    18 Sep 2013, 02:42 PM Reply Like
  • futuresproptrader
    , contributor
    Comments (200) | Send Message
     
    Only because you said that the stock will end lower today. LOL
    18 Sep 2013, 02:47 PM Reply Like
  • ciolan
    , contributor
    Comments (193) | Send Message
     
    Yep, it was only a temporary stay in the green. It did however remained higher than -2%. Let's see today how it goes, IMO the roumour has big chances of being legit
    19 Sep 2013, 04:51 AM Reply Like
  • arcady
    , contributor
    Comments (85) | Send Message
     
    I used to actually like the WSJ until I discovered their unabashed bias, against BBRY being one example.

     

    I am not about to pay them for a subscription to read the small print behind their sensational headline. If there is evidence to back up this headline, why is it not available in this article, for free?

     

    The timing is suspicious; I'll just wait for the details to come out. I am betting there is little or no substance to the 40% number being presented in bold headline...time will tell.

     

    XLBBRY
    18 Sep 2013, 02:49 PM Reply Like
  • Cliff Hilton
    , contributor
    Comments (1410) | Send Message
     
    @arcady,

     

    Same reason I dropped my subscription.
    18 Sep 2013, 02:57 PM Reply Like
  • futuresproptrader
    , contributor
    Comments (200) | Send Message
     
    You can't really say they are biased if they are just reporting the information they receive. Good bad or indifferent. Truth is there just isn't a lot of good news out there on Rimm.
    18 Sep 2013, 03:11 PM Reply Like
  • arcady
    , contributor
    Comments (85) | Send Message
     
    @futuresproptrader:

     

    Sorry, I don't buy your argument.

     

    I am not an expert, but feel somewhat qualified, having majored in journalism in college.

     

    They are NOT just reporting the information they receive, unless they have their head in the sand. (Unacceptable for a major newspaper)

     

    No mention of the Z 30 release? This is selective reporting, cherry picking their material, at best.

     

    Gag me.

     

    XLBBRY
    18 Sep 2013, 03:25 PM Reply Like
  • Dantes_Will
    , contributor
    Comments (323) | Send Message
     
    "I am not an expert, but feel somewhat qualified, having majored in journalism in college."

     

    Yes, you Vince Young and millions of others. Guess that make you the authority in all matters media.

     

    "No mention of the Z 30 release?"
    "Earlier: BlackBerry launches Z30 (formerly the A10)"

     

    Then again, maybe just be happy you graduated.

     

    18 Sep 2013, 03:44 PM Reply Like
  • Z10isgreat
    , contributor
    Comments (188) | Send Message
     
    Did they not also receive the 'news' that the Z30 has launched and that,, by all accounts, it's awesome? What prompted them to run this headline over the other?

     

    These decisions by the media giants direct public opinion. There is nothing random about their choice, it is purposeful, don't kid yourself.
    18 Sep 2013, 03:54 PM Reply Like
  • nurturechef
    , contributor
    Comments (3) | Send Message
     
    I agree with you 150%...."the games WSJ will play" - sounds a little bastardly to me!
    18 Sep 2013, 04:42 PM Reply Like
  • dude111
    , contributor
    Comments (92) | Send Message
     
    Here's the most telling sign:

     

    "Last year, Chief Executive Thorsten Heins embarked on a broad cost-cutting initiative meant shave $1 billion off the company's books"

     

    They missed the word "to" in between "meant" and "shave".
    18 Sep 2013, 05:17 PM Reply Like
  • arcady
    , contributor
    Comments (85) | Send Message
     
    @ Dantes:

     

    All I can say in response is that I opened the link, and chose not to pay WSJ for further info. I saw no mention of Z 30 release, OR "BlackBerry has announced a BBM Android app will launch on Saturday, and a BBM iPhone app on Sunday".
    You may feel free to park your sarcasm, it's counter productive.
    Cheers
    XLBBRY
    18 Sep 2013, 06:01 PM Reply Like
  • rtmunro
    , contributor
    Comments (545) | Send Message
     
    Arcady, This is the WSJ, not some high school kid's blog.

     

    you've now made it clear that the only insight you are capable of adding, when faced with facts you don't want to hear, is to put fingers in you ears and yell, "i can't hear you, I can't hear you!"

     

    That'll be all now. please go play and let the adults talk.
    18 Sep 2013, 09:34 PM Reply Like
  • farmwersteve
    , contributor
    Comments (267) | Send Message
     
    I disagree with you rt

     

    This news comes at a very peculiar time. On the news of bbm cross platform, z30 and 10.2 coming to the z and q, this WSJ piece is perfectly timed to deflate any positives from the above mentioned

     

    However, on the flip side, cutting positions of departments that are no longer needed makes complete sense.
    Why keep the playbook team, why keep most of the BBOS team. They have been building two completely different platforms for a number if years, now that bb10 is the future, having those other staff hang around with different skill sets that are currently needed would not be responsible to the shareholders

     

    Don't get me wrong, it sucks for the staff, but BlackBerry is doing their due diligence in this case
    18 Sep 2013, 10:03 PM Reply Like
  • arcady
    , contributor
    Comments (85) | Send Message
     
    So...adult conversation now includes condescending and sarcastic comment?

     

    OK, I'll purchase an iPhone, I hear they have lots of games.

     

    Cheers

     

    XLBBRY
    19 Sep 2013, 10:18 AM Reply Like
  • rtmunro
    , contributor
    Comments (545) | Send Message
     
    there's a big difference between responsible fiscal management through headcount reductions...and an absolute blood bath, laying off 40% of your employees. come on.
    19 Sep 2013, 10:35 AM Reply Like
  • rtmunro
    , contributor
    Comments (545) | Send Message
     
    @arcady, "So...adult conversation now includes condescending and sarcastic comment?"

     

    there was nothing sarcastic...your approach is to cheer the good, regardless of the source, and dismiss the bad, regardless of the source. sticking your head in the sand is popular around here but that doesn't make it smart.

     

    arcady, "OK, I'll purchase an iPhone, I hear they have lots of games."

     

    you're reinforcing my point regarding childish vs. adult conversation.
    19 Sep 2013, 11:18 AM Reply Like
  • gchaput
    , contributor
    Comments (114) | Send Message
     
    From Globe & Mail:
    "BlackBerry launched a new flagship smartphone, the Z30, The Globe and Mail's Omar El Akkad reports.

     

    The touchscreen device comes with myriad new features, including stereo speakers, a 1.7-gigahertz processor and “priority hub” software that learns a user’s most important contacts and conversations and collects them in one place.

     

    BlackBerry will begin rolling out the Z30 next week through its global carrier partners, starting in the United Kingdom and the Middle East and expanding to other markets in the lead-up to the holiday season."

     

    As usual, the US conspiracy to prop up Apple against Samsung & BBRY continues and likely the American consumers will not be given the opportunity to own the Z30 - too bad as this effectively prevents US consumers from owning quality.
    18 Sep 2013, 02:55 PM Reply Like
  • arcady
    , contributor
    Comments (85) | Send Message
     
    Exactly what I meant by suspicious timing...a world class device is released, but WSJ prints a sensational headline of doom and gloom, with no mention of a new product.

     

    I have begun to wonder if there is a conspiracy (call it what you will) against BBRY because the OS is not friendly to targeted advertising.
    If true, most major corporations have a vested interest in BBRY failure.
    Just sayin'
    XLBBRY
    18 Sep 2013, 03:07 PM Reply Like
  • rtmunro
    , contributor
    Comments (545) | Send Message
     
    if the largest telecom companies HAVE teamed up with the largest phone makers on the planet, AND pulled in the largest media companies to prop up Apple and Samsung....WHY ARE YOU STILL FIGHTING? I mean, you may hate that blackberry is getting crushed by this global conspiracy, but if you believe it's true you also realize you simply can not win. You're admitting there is no hope for BBRY and certainly no point in investing! Right?
    18 Sep 2013, 09:43 PM Reply Like
  • arcady
    , contributor
    Comments (85) | Send Message
     
    I am not admitting there is no hope for BBRY. I believe they can be profitable with a small percentage of the market, and I believe that it will take years for competitors to come up with new comparable OS.

     

    I may be proved wrong on that if others are granted ATO by DOD, but I'm betting that won't be any time soon.

     

    Cheers
    XLBBRY
    19 Sep 2013, 10:28 AM Reply Like
  • rtmunro
    , contributor
    Comments (545) | Send Message
     
    ok, so to summarize what you believe:

     

    VZ, AT&T, Apple, Samsung and the Wall Street Journal are conspiring against Blackberry.

     

    But Blackberry can defeat all those companies and be successful.

     

    Good luck. Those companies have basically endless cash and influence.
    19 Sep 2013, 10:33 AM Reply Like
  • Black Truck
    , contributor
    Comments (39) | Send Message
     
    If this is true, it is in fact a very good news story.

     

    While I feel nothing but sympathy for any employees impacted by this and their families, it is absolutely imperative that Blackberry aligns its labour force with sales. Done correctly, this will result in a highly profitable Blackberry, and once profitable Blackberry will have lots of options moving forward.

     

    If local government acts proactively, the displaced employees after a period of adjustment will spawn a whole new generation of companies in the K-W area, and will in fact act as an economic multiplier for the region and province. Years from now, we will look back and realize this was the best possible outcome.
    18 Sep 2013, 02:55 PM Reply Like
  • Black Truck
    , contributor
    Comments (39) | Send Message
     
    It was, however, very suspicious timing for the story (as others have noted).

     

    No doubt timed to overshadow what was an incredibly positive news day for Blackberry (BBM cross platform and Z30).
    18 Sep 2013, 04:43 PM Reply Like
  • Stock Market Mike
    , contributor
    Comments (1843) | Send Message
     
    IF they trim that many employees, there is no way they will lose money in future quarters. But they also won't have enough employees for much growth. They really will be locking themselves into a niche position, possibly holding out for an acquisition. Disappointing if it happens, but it would result in a higher share price.
    18 Sep 2013, 02:57 PM Reply Like
  • Chris Lau
    , contributor
    Comments (1572) | Send Message
     
    $0.20 drop thanks to WSJ on this outrageous story (40% drop?!) - even an exit from the US market won't cause a job cut this great.

     

    If you're going to lie, don't exaggerate the lie. It makes the lie more convincing.
    18 Sep 2013, 03:02 PM Reply Like
  • alext1379
    , contributor
    Comments (706) | Send Message
     
    If true, means business is worse than expected, or close enough to cause the shorts to feast on another stock tank.
    However, it depends what kind of metal shareholders are made of. The shorts will definitely try to trigger stoplosses at the first sign of any news that could be spun negatively in an attempt to start a stampede.

     

    My advice to anyone long is to buy some put options as insurance in the event of a big drop after earnings. i would also advise to buy calls after a drop incase a buyout offer materializes.

     

    If another titanic drop occurs, I will def pick up more calls on the cheap around the $12 or $13 range.
    18 Sep 2013, 03:07 PM Reply Like
  • AndyMahnFL
    , contributor
    Comments (49) | Send Message
     
    Hi AlexT1379 -

     

    I think you meant 'mettle' : noun
    1. a person's ability to cope well with difficulties or to face a demanding situation in a spirited and resilient way.
    "the team showed their true mettle in the second half"

     

    However; if you did intend the "metal" that you typed, let's hope [long] shareholders are composed of the titanium variety. For it truly has been one downward and sideways ride, for as long as I have been watching.
    18 Sep 2013, 10:48 PM Reply Like
  • oldtimer125
    , contributor
    Comments (126) | Send Message
     
    Very positive news that Blackberry continues to match g & a with revenue and free cash flow.
    18 Sep 2013, 03:13 PM Reply Like
  • Zzoot1
    , contributor
    Comments (179) | Send Message
     
    I believe its true.

     

    Blackberry usually leaks their bad news to the Media first,
    then confirm it later.

     

    Its Heins' style
    18 Sep 2013, 03:16 PM Reply Like
  • jcount
    , contributor
    Comments (155) | Send Message
     
    This is either true, or true in the sense that they already have an offer for partnership or aqusision (drive the price down so the pros can get a cheap offer)
    18 Sep 2013, 03:26 PM Reply Like
  • ciolan
    , contributor
    Comments (193) | Send Message
     
    Or, more likely IMO, it's just a condition set by the buyer
    18 Sep 2013, 04:57 PM Reply Like
  • jno
    , contributor
    Comments (30) | Send Message
     
    This could be a sign of the exit out of manufacturing. It wouldn't surprise me but seems too large a cut and premature.
    18 Sep 2013, 03:31 PM Reply Like
  • rtmunro
    , contributor
    Comments (545) | Send Message
     
    "seems" to WHO exactly? to you!?

     

    longs! take heed! jno declares job cuts to be too soon and too deep. The actions of the Blackberry B.O.D. and C level management team are misinformed.
    20 Sep 2013, 11:20 AM Reply Like
  • ELLAS
    , contributor
    Comments (1483) | Send Message
     
    "contends with weaker-than-expected BB10 hardware sales"
    This comment is complete nonsense. All based on here say and fact-less rumours/speculation. Also all company's go through restructuring and all company's layoff employees. Regardless whether this is true or not, it’s the timing of this news I do not like. If true, be sure that WSJ was sitting on this news for a while now, and just waiting for the best BASHING BBRY opportunity 
    18 Sep 2013, 03:35 PM Reply Like
  • CGT77
    , contributor
    Comments (70) | Send Message
     
    Very disappointed in WSJ. I thought they were a credible source. It is so obvious that there's a "vendetta" against BBRY, it doesn't take Einstein to figure that one out!
    18 Sep 2013, 03:53 PM Reply Like
  • Z10isgreat
    , contributor
    Comments (188) | Send Message
     
    Yes it's completely obvious - read the CNET review on the Z30. The derision is palpable. The author goes to great lengths to comment on the 'gargantuan' screen, and then buried several lines down is the grudging acknowledgement that it's not as big as some of the other entries in the phablet market. Seriously, where can you go for an unbiased opinion anymore!
    18 Sep 2013, 04:01 PM Reply Like
  • alext1379
    , contributor
    Comments (706) | Send Message
     
    It makes me believe they are closer to being purchased than we know. 5000 ppl at $50,000 avg a year is $250 million. What was their loss in Q1, $80 million?

     

    If you were to buy BB, would you want to inherit alot of staff that you already have? BB is cleaning the books to make them more attractive to a buyer and saves them the cost of severance etc.
    18 Sep 2013, 04:25 PM Reply Like
  • the_value_vulture
    , contributor
    Comments (157) | Send Message
     
    The company is either positioning for the sale or already essentially sold. I would say read between the lines but it is pretty much in the headline of this story.
    18 Sep 2013, 05:20 PM Reply Like
  • Crazy Mazy
    , contributor
    Comments (434) | Send Message
     
    Did Blackberry make a statement about cutting 40% of the work force? No they didn't so lets just ignore this article! Is it a coincidence that they report this news but not the Z30 launch?
    18 Sep 2013, 04:41 PM Reply Like
  • tiger8896
    , contributor
    Comments (574) | Send Message
     
    No other news source reported the huge layoffs, they only reported the WSJ article and BBRY said they wouldn't comment on rumors and only confirmed their "right sizing" the company.

     

    I have to say it's a dubious story right now, that earnings report on the 27th just got more interesting.
    18 Sep 2013, 05:13 PM Reply Like
  • Dampflok
    , contributor
    Comments (787) | Send Message
     
    yes, conspiracies everywhere. It would be best if WSJ would check the timing, contents, bias of their news releases with paranoid underwater longs first!
    18 Sep 2013, 05:37 PM Reply Like
  • the_value_vulture
    , contributor
    Comments (157) | Send Message
     
    For those being delusional why would blackberry refute the claim immediately that it was cutting it's sales force last week by 10% but have no comments about these rumors? It's because they are facts! Get real.
    18 Sep 2013, 05:38 PM Reply Like
  • Crazy Mazy
    , contributor
    Comments (434) | Send Message
     
    It's amazing how the media keeps saying BB sales are slow. Look what's happening with Apple. Even they are having to contend with slow sales and their latest release Iphone 5 and 5C was met with a yawn. In China they are off to rough start. So as you can see it's not only BB that is having difficulties.
    18 Sep 2013, 06:08 PM Reply Like
  • rtmunro
    , contributor
    Comments (545) | Send Message
     
    Wait, are you saying the media is disproportionately reporting the status of BBRY? there's been almost daily coverage of Apples struggles. So, I don't understand what you are getting at.

     

    And, do you really mean to suggest that the global smartphone market dying...that's a bright side for BBRY? Or is that just another attempt to feel better about being horrible?
    18 Sep 2013, 09:56 PM Reply Like
  • Crazy Mazy
    , contributor
    Comments (434) | Send Message
     
    @ value vulture, they didn't refute it immediately. I believe it was 1 day later.
    18 Sep 2013, 09:51 PM Reply Like
  • sfinvestor
    , contributor
    Comments (883) | Send Message
     
    "We will not comment on rumors and speculation," said BlackBerry spokesman Adam Emery. "We are in the second phase of our transformation plan. Organizational moves will continue to occur to ensure we have the right people in the right roles to drive new opportunities."

     

    It is definitely within the boundary to comment on rumors of a layoff such as this. lol. The non-answer is telling me exactly they are reviewing headcount and expect mass layoff.

     

    It's time to reconcile what management said in the investor conference in July 2013 vs what is happening now. I totally despise deceiving mgmt. This one is it, I totally don't believe a word that comes from mgmt.

     

    You don't go through a mass restructurung without shutting down segments and business line. Perhaps they will wind down the handset division and focus on enterprise. Once the handset winds down, they'll be more attractive to propspective buyer. BBRY is done. launching your flagship device in Malysia is a joke.
    18 Sep 2013, 10:10 PM Reply Like
  • mirage12
    , contributor
    Comments (98) | Send Message
     
    The plan has always been to maximize shareholder value. That is sure being put to the test here.
    18 Sep 2013, 10:33 PM Reply Like
  • Crazy Mazy
    , contributor
    Comments (434) | Send Message
     
    Hold on WSJ didn't say were this info came from, and until Blackberry officially confirms or denies that story, it all just BS speculation.
    18 Sep 2013, 11:00 PM Reply Like
  • Ben Learner
    , contributor
    Comments (211) | Send Message
     
    WSJ has been generally quite reliable in the past. One has to accept the spin, the timing and the unnamed sources. It does look a bit suspicious.

     

    The question is what are the implications for BlackBerry if this were correct. Will a leaner BlackBerry be more efficient and profitable? In my opinion it seems more logical that a partnership, rather than an outright sale, is in the pipeline and they need to avoid duplication of the workforce.

     

    Meanwhile, BlackBerry keeps executing and meeting deadlines. The new Z30 seems a capable device and BBM will be available this week on Android and iOs. Reviews have so far been positive.

     

    It may all make sense in a few months. Right now it sure does not.
    19 Sep 2013, 01:13 AM Reply Like
  • sfinvestor
    , contributor
    Comments (883) | Send Message
     
    "Meanwhile, BlackBerry keeps executing and meeting deadlines. The new Z30 seems a capable device and BBM will be available this week on Android and iOs. Reviews have so far been positive"

     

    I think you believe MGMT way too much on face value.

     

    The fact of the matter is, BBRY put all their marbles on BB10 and the success of hardware and software future is dependent on it. I know it, they know it, you don't know it. BBRY and meeting deadlines must be a joke. BB10 was delivered about 2 years too late.

     

    The fact of the matter is, BB10 is an epic fail, I knew that in April when I had my hand on the Z10. There is nothing BB10 had that IoS or Android don't. It may be on par but that is not going to convert people from other ecosystem to BBRY, in fact, it will just turn more away. The value propostion with Apple includes apps, Iworks, Iradio, iCloud, Ipad, etc. Material things, BBRY is missing. Android has the wide gamut of devices, something for everyone. BBRY has BBM, but so what, so does everyone. Even the southeast asians will convert to Android as messenger is a dime a dozen. The situation is BB10 is too little too late.

     

    Without BB10, every device they make will just be deep red. You can't make money without scale as there is too much development cost with too short product lifecycle, you scale up and risk billion dollar inventory writedowns. It's a brutal business and there is no such thing as a niche business phone as the bigger players will just eat that up. Security while important is just a small part of it and who is to say Apple or Google can't come up with a better value proposition already. Long story short, there is no business niche.

     

    Every hardware BBRY will make will be money loser. That's the reality of it and even MGMT is beginning to recognize it. The problem is bb7 is garbage too and useless to a consumer who is not a dinosaur so the whole handset division is literally a liability.

     

    The second problem with BBRY is that traditionally made money on service access fee directly tied to bb7 devices. This division kept them afloat for awhile. Well, you know those will be gone too in 2 years and you are asking BBRY to pull magic out of the enterprise bottle. If you think SAF will not be gone in two years, you should read up their disclosure on SAF.

     

    The enterprise division to me is not worth much when SAF will be gone in two years. What are they replacing that with except hope and hype. BB balance is not much of a value add proposition.

     

    In any case, it will be interesting to get the conference call and finally have mgmt answer some questions. between the investor conference in July and today, there is a whole lot of disconnect.
    19 Sep 2013, 01:53 AM Reply Like
  • Nick Shadow
    , contributor
    Comments (154) | Send Message
     
    WSJ went to h@ll in a hand basket when bought by Murdock
    19 Sep 2013, 08:58 AM Reply Like
  • Crazy Mazy
    , contributor
    Comments (434) | Send Message
     
    They have 24 hours to refute those claims according to SEC rules. So we will see! If this story is fabricated I believe you will see a lawsuit launched. BTW if true then maybe they have found a company that will manufacture the devices for them (i.e they are selling the hardware part of the business). If that's the case good reason to layoff that many people, and good for the profitability of the company! So either way this may not be bad news. Also seems odd they would launch a new product if they don't intend to make it?
    19 Sep 2013, 09:14 AM Reply Like
  • Crazy Mazy
    , contributor
    Comments (434) | Send Message
     
    BTW a little fact a lot of people missed was that Blackberry changed the processor to a 1.7 MG HZ processor at the last moment in order to dramatically improve the performance. Okay so what is the significance, well if BB was going to just sell what products they currently had until a new buyer came forth, why would they spend a lot of money to buy the new components when they could have used up their existing inventory? Yes because they really want this device to succeed that's why. And also if they didn't intend to make this product successful why would they lay off 40% of their work force. Who will build it? Come on people be careful not to fall for thsi nonsense that WSJ is reporting.
    19 Sep 2013, 03:17 PM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (1868) | Send Message
     
    Bloomberg:

     

    "BlackBerry Ltd poised for writedown as inventory of unsold smartphones swells to almost $1-billion"

     

    http://bit.ly/18Ejx9Q
    19 Sep 2013, 03:26 PM Reply Like
  • rtmunro
    , contributor
    Comments (545) | Send Message
     
    Setting aside all else, can you imagine the morale among the rank & file employees at Blackberry HQ? It must be a very difficult and dismal place to work right now.

     

    It must be very difficult to keep your head up and stay positive when at best half your colleagues are losing their jobs, and at worst, you are joining them.
    20 Sep 2013, 11:22 AM Reply Like
  • sfinvestor
    , contributor
    Comments (883) | Send Message
     
    To those who canceled their subsricption to WSJ, better resubsribe. The key is not what you read, it is how you evaluate all the facts and circumstances as you understand them. File this as a learning lesson.
    20 Sep 2013, 11:59 PM Reply Like
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