Blackberry announced it was firing 4,500 of its staff on Friday as the struggling smartphone firm said it expects to lose nearly $1 billion on disappointing sales of a new device.
The company said "more intense competition" meant it was likely to report a loss of between $930 million and $960 million for its fiscal second quarter following lackluster sales of the Z10 smartphone. Blackberry sold 3.7 million smartphones in the quarter, it said. The news came as Apple released its two latest iPhones on Friday which analysts were predicting the company could sell 5m in the opening weekend.
The company's shares were briefly suspended as rumors of the massive loss circulated. In a statement Blackberry said it expects to report revenue of $1.6 billion for the quarter, barely half of the $3.1 billion analysts polled by Thomson Reuters had expected.
The layoffs follow the loss of 5,000 jobs last year and a smaller round of redundancies earlier this summer. The new losses will reduce Blackberry's 12,700 plus global workforce by approximately 40%. Expenses will be cut by 50% by the end of the first quarter of 2015, the company said.
Blackberry's share of the smartphone market has plummeted as Apple and devices from Samsung, HTC and others have taken its once sizeable lead. BlackBerry had more than 14% of the US smartphone market in 2011, but according to research firm IDC, it now has less than 3 percent. Once the market leader, IDC says it now trails in fourth place behind Microsoft's Windows Phone brand, devices powered by market leader Google's Android system and Apple.
In 2012 Blackberry reported a loss of $646 million as its revenue slid 40%, to $11 billion. This year the company's fortunes have continued to decline despite the introduction the BlackBerry 10 smartphone, which received positive reviews, and the Z10.
Blackberry lost a further four million subscribers and posted a loss of $84 million in the quarter ended 11 June. Last month the company appointed a strategic committee to review the future of its business, a move that could lead to a sale of all or parts of the business.
Original Headline: Blackberry to fire 4,500 employees as sales of new device plummet
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