BlackBerry to lay off 4,500 staff, or 40% of global workforce

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Thorsten Heins, president and CEO at BlackBerry, speaks at a conference in Orlando. (AP) Thorsten Heins, president and CEO at BlackBerry, speaks at a conference in Orlando. (AP)
SummaryBlackBerry expects to post a staggering loss of $950 million to $995 million for the quarter.

It was once so addictive it inspired the nickname "CrackBerry." President Barack Obama confessed to being among the millions of devotees who couldn't bear to stop tapping feverishly away on its tiny keyboard. Madonna once said she slept with hers under her pillow. Then came the iPhone.

Users newly addicted to Facebook and photo-sharing and Angry Birds started flirting with the opposition. And as more smartphones flooded the market with their supersize Samsung screens and thousands of apps, the BlackBerry failed to keep up with the flash.

This year's launch of BlackBerry 10, its revamped operating system, and fancier new devices ó the touchscreen Z10 and Q10 for keyboard loyalists ó was supposed to rejuvenate the brand and lure customers. But the much-delayed phones have failed to turn the company around. At their peak in the fall of 2009, BlackBerry's smartphones enjoyed global market share of over 20 per cent, says Mike Walkley, an analyst with Canaccord Genuity. Their piece of the pie has since evaporated to just 1.5 per cent.

Related: iPhone 5S, iPhone 5C to sport BlackBerry's Messenger, Android too

Now, BlackBerry has warned that it expects to report a huge quarterly operating loss next week and that it will cut more than a third of its global workforce, rekindling fears of the company's demise and sending its shares into a tailspin.

The company said it expects to report a net operating loss of between $950 million and $995 million in the quarter ended Aug. 31, due to writedowns and other factors.

Related: BlackBerry Z30 unveiled as 'biggest, fastest and most advanced' flagship smartphone

The results will put more pressure on BlackBerry to find a buyer for either some parts of the company, or for all of it. It said last month it is weighing its options, including an outright sale, in the face of persistently lackluster sales of its new smartphones, which run on the BlackBerry 10 operating system.

"The company has sailed off a cliff," said BGC Partners analyst Colin Gillis. "What do you expect when you announce you're up for sale? Who wants to commit to a platform that could possibly be shut down?"

BlackBerry's Toronto-listed shares fell as much as 23.7 percent to C$8.25 on Friday, their lowest this year, before closing down 16 percent at C$9.08. The company's Nasdaq-listed shares ended 17 percent lower at $8.73, after falling as low as $8.01.

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