BlackBerry Plans to Cut 4,500 Jobs

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OTTAWA -- BlackBerry, the embattled smartphone maker, said on Friday that it would lay off 4,500 employees, or roughly 40 percent of its work force, in a desperate bid to cut costs.

BlackBerry's core smartphone business has struggled mightily as industry rivals have upstaged the company time and again. BlackBerry said it would report a quarterly loss of $950 million to $995 million next week.

The loss is mainly the result of a write-off of unsold BlackBerry phones, as well as $72 million in restructuring charges. The company said that it would discontinue two of the six phones it offers.

It is the latest setback for BlackBerry, which was once a pioneer and a leader in the smartphone market.

Four years ago, BlackBerry had 51 percent of the North American smartphone market, according to the research firm Gartner. But the fast-changing industry, and in particular phones from Apple and Samsung, left the company behind.

Consumers moved to smartphones with full touch screens, multiple cameras and hundreds of thousands of apps to choose from. BlackBerry's devices largely stayed the same, often with half-screens and a physical keyboard.

Early this year, the company introduced its largest and most ambitious turnaround effort so far, with its BlackBerry 10 line of phones. But the new devices have not dented the grip on the market by Apple and Samsung. And the latest phone in the line, the Z30, caused hardly a ripple when it was introduced this week.

The failure of the BlackBerry 10 line of phones quickly led to speculation that the company, like Palm before it, would be broken apart and perhaps gradually disappear, at best lingering as little more than a brand name. This summer, BlackBerry announced that it was undertaking a strategic review, and many analysts expected the move to lead to a sale of the company.

No obvious buyers have emerged, at least publicly. And the announcement on Friday could suggest that the company may focus less on consumer devices.

If the company goes private, the move could help BlackBerry. Under such a situation, it would no longer have to manage quarterly financial results and appease public investors, who are often interested in short-term stock gains. But going private, even with a much smaller operation than it had just a few years ago, would not guarantee a return to profits and growth.

Shares of BlackBerry, which is based in Waterloo, Ontario, fell more than 17 percent, or $1.80, to $8.73.

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This article originally appeared in The New York Times.


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