BlackBerry, the Canadian-based smartphone maker, has announced that it plans to cut more than 4,500 jobs, in a bid to cut cost, following an expected Q2 2014 net operating loss of almost $1 billion.
The company said in a statement that as a consequence of the more “intense competition”, it expects to report a primarily non-cash, pre-tax charge against inventory and supply commitments in the second quarter of approximately $930 million to $960 million, which is primarily attributable to BlackBerry Z10 devices.
BlackBerry launched the Z30 flagship device in Malaysia a few days ago. With the latest announcement, BlackBerry said that it will “re-tier” the BlackBerry Z10 smartphone to make it available to a broader, entry-level audience.
Thorsten Heins, President and Chief Executive Officer of BlackBerry said, “We are implementing the difficult, but necessary operational changes announced today to address our position in a maturing and more competitive industry, and to drive the company toward profitability. Going forward, we plan to refocus our offering on our end-to-end solution of hardware, software and services for enterprises and the productive, professional end user. This puts us squarely on target with the customers that helped build BlackBerry into the leading brand today for enterprise security, manageability and reliability.”
For the second quarter(June-August), approximately 5.9 million BlackBerry smartphones were sold through to end customers, mostly BlackBerry 7 devices. However, it will only recognize hardware revenue on approximately 3.7 million BlackBerry smartphones as the remainder shipments were made prior to the second quarter.
BlackBerry currently expects to report revenue for the second quarter of approximately $1.6 billion, of which approximately 50% is expected to be service revenue.