Blackberry to lay off employees across the world in its device business, will impact global operations, says company spokesperson.
Blackberry Inc. (BBRY, Financial) is cutting jobs across the globe, mostly in its smart phone device operations, the company said on Friday. The move comes as the company tries to move away from its smart phones division and shifts focus to higher profit margin businesses like making smart appliances, Security & Privacy software, and building enterprise applications.
“We continue to grow customer facing teams around the world, and we continue to invest in bringing new talent to support areas of strategic focus around software, enterprise, security and the Internet of things, for example," Blackberry said in a statement.
Tough competition
The Ontario-based company has not disclosed how many employees would be affected in this move, but sources close to the firm say that the company is considering closing its operations in Sweden, which would result in a loss of approximately 100 jobs. As per the company website, Blackberry had 6,225 employees as of February 2015.
The telecommunication company known to be the developer behind the innovative and highly secure Blackberry smart phones and tablets has been facing immense competition with the growing popularity of iPhone and Android devices. Due to the increasing popularity of Apple’s (AAPL, Financial) iPhone, the company saw its stock prices fall down by a whopping 87% between 2010 and 2013 as its smart phone market reduced to a mere 1% in June, 2014 compared to 20% market it held in 2009.
The jobs cuts have come at a time when the company is battling hard to keep its costs down and change focus from its smart phone segment to the other lucrative segments of enterprise building and security software market. The first quarterly revenue for 2015 for the company was $966 million, down by $10 million compared to the previous quarter.
Future strategies
Since its global market share fell below 1%, Blackberry has kept its target market as the finance professionals, corporate and government employees who required stringent securities on their devices.
While announcing the layoffs, a company spokesman said, “Our intention is to reallocate resources in ways that will best enable us to capitalize on growth opportunities while driving towards sustainable profitability across all facets of our business”.
In a move which clearly defines this shift in focus, the company has already started hiring new employees for sales and marketing of its software and services in certain areas in North America and Waterloo.
As Carmi Levy, a London analyst said, “The combination of cuts and new hires is a clear sign Blackberry is reducing its focus on devices and ramping up the software and services side of the business”.
Our Take
Though Blackberry still remains dedicated to its device business, recently having released a number of new smart phones in the market with more planned for the coming year, the company is banking on its new range of software applications aimed at increasing mobile security for Blackberry devices and other devices running on Android and IOS Operating systems.Ă‚
For now, Blackberry seems to be intent to focusing on other segments, even as CEO John Chen has promised he will find ways to make the phone market profitable again.
