BlackBerry Layoffs Leave Dark Cloud Over Handset Business - InformationWeek

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IoT
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Mobile // Mobile Devices
Commentary
2/8/2016
12:30 PM
Eric Zeman
Eric Zeman
Commentary
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BlackBerry Layoffs Leave Dark Cloud Over Handset Business

BlackBerry cut about 200 employees this month, which prompted many to question its commitment to smartphones, BlackBerry 10 in particular.

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BlackBerry has trimmed its headcount again, letting loose employees both at its Waterloo, Ontario, headquarters and at a facility in Florida. BlackBerry didn't specify which business units were impacted, but several reports suggest the cuts primarily affected the company's smartphone business.

News of the cuts was first reported by Canada-based Mobile Syrup, which claimed the layoffs were "massive" and numbered close to 1,000 jobs chiefly at BlackBerry's main facility. The company later came forward and said only a "small number" of people lost their jobs. The real numbers tell a different story.

The corporate-like statement issued by the company reads:

As BlackBerry continues to execute its turnaround plan, we remain focused on driving efficiencies across our global workforce. This means finding new ways to enable us to capitalize on growth opportunities, while driving toward sustainable profitability across all parts of our business. Approximately 200 employees have been impacted in Canada and Florida. It also means that BlackBerry is actively recruiting in those areas of our business that will drive growth.

BlackBerry CEO John S. Chen has been on a cost-cutting mission ever since he replaced Thorsten Heins in November 2013. Many of the job cuts have focused on the company's floundering smartphone business. (Analyst firm IDC doesn't even call out BlackBerry OS's marketshare anymore, and instead lumps the platform into the "other" category in its quarterly forecasts.) BlackBerry's main thrust is now its BES and device administration products, which handle BlackBerry, Android, iOS, and Windows devices.

(Image: thamerpic/iStockphoto)

(Image: thamerpic/iStockphoto)

BlackBerry 10's utter failure forced the company to change direction last year.

[Read more about BlackBerry's embrace of Android.]

It released the Priv smartphone -- based on Google's Android platform -- in November. Chen reiterated BlackBerry's commitment to BBOS last month, but at the same time the company shut down its Built for BlackBerry certification program. The Built for BlackBerry program helped developers create native apps for the platform.

Moreover, Damian Tay, BlackBerry's senior director of product management, basically confirmed the death of BBOS. "The Priv device is essentially our transition to Android … The future is really Android. We went [there] essentially for its app ecosystem," said Tay.

The Priv is off to a good start, but isn't safe, either. Last year Chen made it perfectly clear that he's not committed to its hardware business. He noted that BlackBerry's smartphones need to generate a profit this year, "Otherwise I have to think twice about what I do there."

Talk about mixed signals.

Mobile Syrup contends that 150 of those laid off last week were part of the BlackBerry 10 team. With a total employee base of about 2,700 in the Waterloo area, it's not clear how many are left working on its seemingly shelved mobile operating system.

BlackBerry's smartphone business is nearing the end of its rope. Chen is standing by with a pair of sharp shears, ready cut the hardware unit once and for all if it doesn't deliver.

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Eric is a freelance writer for InformationWeek specializing in mobile technologies. View Full Bio
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