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Pink Slips on the Way for Thousands of BlackBerry Workers

By Rachelle Dragani E-Commerce Times ECT News Network
Sep 19, 2013 11:36 AM PT

BlackBerry is preparing to lay off 40 percent of its workforce in an effort to slash costs, according to a Wednesday report in The Wall Street Journal.

Pink Slips on the Way for Thousands of BlackBerry Workers

The news came on the same day that BlackBerry launched its Z30 smartphone, a 5-inch, all-touch smartphone that the company said is its biggest, fastest and most advanced smartphone to date. BlackBerry also confirmed Wednesday it will start offering BlackBerry Messenger, its proprietary messaging service, to Android on Saturday and iOS on Sunday.

The newest offerings don't seem to have been enough to help the once-popular smartphone maker compete against the now-dominant iOS and Android platforms, though. BlackBerry announced last month it formed a committee to explore strategic alternatives -- including sale -- for the company going forward.

BlackBerry's latest cost-savings attempt reportedly involves slashing about 5,000 jobs across several departments within the company. It began a round of layoffs in sales and research and development earlier in the summer, said the Journal report.

BlackBerry did not respond to our request to comment for this story.

'It May Have Come Too Late'

BlackBerry's new Z30 and its move to give in to consumer demand and offer BBM on Android and iOS are quality offerings, said John Feland, CEO and founder of Argus Insights, but the company's last-ditch effort may not be enough to help restore it.

"Making BBM broadly available is another move in BlackBerry's 'if you can't beat 'em, join 'em' strategy of running Android applications within BB10," Feland told the E-Commerce Times. "Consumers have been begging for BBM to be a cross-platform application for years, but BlackBerry has held back trying to use BBM as the carrot to entice customers into their ecosystem.

"The flip is good," he added. "The concern is it may have come too late. BlackBerry needs new customers, especially outside the enterprise."

The company could be optimistically hoping that a round of cuts could help trim the company and attract some of those new customers, Feland added.

"The layoffs reflect a leaner firm, with a less complex product portfolio, streamlined offerings on hardware and software," Feland pointed out. "Trimming the workforce is part of bringing focus, but hopefully without hollowing out the core talent needed to bring BlackBerry back."

Parts for Sale?

Since a comeback seems optimistic, however, the company is likely also hoping to make BlackBerry a trim, efficient organization that could be ripe for the taking, said Colin Gibbs, analyst at GigaOM Pro.

"The latest reported round of layoffs are largely an effort to make BlackBerry more appealing to a potential buyer, and I think a sale could come before the end of the year," Gibbs told the E-Commerce Times.

At this point, that sale might come piece by piece, as various companies try to pick apart the divisions of BlackBerry that are still valuable, suggested Ben Bajarin, director and founder of Creative Strategies.

"The layoffs are just a sign that it is bleeding cash and needs to streamline in order to stay afloat long enough to find a suitor," Bajarin told the E-Commerce Times.

"Any part of them that is interest for a sale is not the hardware but the back-end services and security features," Bajarin concluded, "but even that may be too late, since many IT organizations are simply moving away from BlackBerry as a whole in favor of other solutions."

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