Mobile

BlackBerry bombs: Announces $1B loss, 4,500 layoffs, and shifts away from consumer market

BlackBerry CEO Thorsten Heins shows off the Z10 and Q10 BlackBerry 10 phones.

Above: BlackBerry CEO Thorsten Heins shows off the Z10 and Q10 BlackBerry 10 phones.

Image Credit: Devindra Hardawar/VentureBeat

This is what it looks like when a giant falls.

BlackBerry just announced a devastating preview of its second quarter financials, and just about everything looks terrible: It expects an operating loss between $950 million and $995 million in the second quarter, it’s laying off 4,500 employees, and it’s refocusing on enterprise and “prosumer” customers rather than mainstream consumers.

We heard a few days ago that the layoffs would be coming, but the full story is even more damning. The situation is even worse than when the company announced last month that it’s exploring selling itself off to another firm or partnering with another company to save its skin.

As part of its move away from the consumer market, the company says it will reduce its smartphone portfolio from six phones to four (at this point, there are only two BlackBerry 10 devices on the market). Now that the iPhone and Android are dominating mainstream smartphone buyers, BlackBerry’s only hope is to appeal to the businesses that need its secure services and its few remaining hardcore fans. The company plans to offer two high-end smartphones and two entry-level phones, with each group containing an all-touchscreen device and physical keyboard model.

BlackBerry says it will also offer hardware and software services to other companies. It just announced a new flagship smartphone, the BlackBerry Z30, as well as plans to bring its BlackBerry Messenger service to the iPhone and Android this weekend.

BlackBerry expects revenues of $1.6 billion for the second quarter as well as sales of around 3.7 million smartphones (most of which were BB 7 devices). The company also plans to cut its operating costs in half by the end of Q1 2015.

“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,” said BlackBerry CEO Thorsten Heins in a statement. “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. This puts us squarely on target with the customers that helped build BlackBerry into the leading brand today for enterprise security, manageability and reliability.”


Mobile developer or publisher? VentureBeat is studying mobile marketing automation. Fill out our 5-minute survey, and we'll share the data with you.