BlackBerry report that it will lay off 40% or 4,500 employees of its global workforce, as it reports a nearly $1 billion second-quarter loss a week earlier than the results were expected. BlackBerry had been scheduled to release earnings next week. But the Canadian company said late Friday afternoon that it expects to post a staggering loss of $950 million to $995 million for the quarter, including a massive $930 million to $960 million write down of the value of its inventory due to increasing competition.
Shares were halted pending the news and plunged as low as $8.01 when the stock reopened for trading. Shares regained some ground to close down 17 percent at $8.72.
The BlackBerry, pioneered in 1999, was the dominant smartphone for on-the-go business people and other customers before Apple debuted the iPhone in 2007. Since then, BlackBerry Ltd. has been hammered by competition from the iPhone as well as Android-based rivals like Samsung.
In January, the company unveiled new phones running a revamped operating system called BlackBerry 10. The much-delayed touchscreen Z10 and keyboard Q10 were designed to better compete for customers and rejuvenate the brand. But the phones failed to turn the company around. BlackBerry’s market share continues to lag its rivals.
Blackberry, formerly known as RIM, was once Canada’s most valuable company with a market value of $83 billion in June 2008, but the stock has plummeted since, from over $140 share to less than $9. Its decline is evoking memories of Nortel, another Canadian tech giant, which ended up declaring bankruptcy in 2009.