BlackBerry Ltd warned late Friday 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, which has struggled to claw back market share from the likes of Apple’s iPhone and Samsung Electronics’ Galaxy phones, said it expects to report a net operating loss of between $950 million and $995 million in the quarter ended August 31, due to writedowns and other factors.
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 lacklustre 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 Nasdaq-listed shares ended 17 per cent lower at $8.73, after falling as low as $8.01.
Waterloo, Ontario-based BlackBerry, once Canada’s premier technology company, said it expects to book a $930 million to $960 million writedown in its fiscal second quarter owing to a ballooning stockpile of unsold BlackBerry Z10 devices.
BlackBerry said it expects its adjusted net loss, before giving effect to the inventory and restructuring provisions, will be in a range of about $250 million to $265 million, or a loss of 47 cents to 51 cents a share. BlackBerry sees about $1.6 billion of revenue in the second quarter
The company, which had warned that job cuts were in the offing, plans to shed 4,500 jobs. BlackBerry has already undergone a major round of job cuts over the last 12 months. It employed 12,700 people as of March, and once had close to 20,000 employees.