BlackBerry Woes Lead To Job Cuts

BlackBerry CEO Heins begs cranky investors for patience at annual shareholder meeting, as company struggles to regain lost footing.

Eric Zeman, Contributor

July 10, 2013

3 Min Read
InformationWeek logo in a gray background | InformationWeek

BlackBerry didn't deliver the news its investors wanted to hear at this week's annual general meeting. Shareholders wanted to learn that things are improving, looking up, that the stock might bounce back someday, and that the company has a long-term future ahead of it. BlackBerry couldn't promise any of these things.

For starters, CEO Thorsten Heins was on the defensive about sales of its BlackBerry 10 handsets. The Z10 launched in February and the Q10 followed in May. Both devices use the company's new BlackBerry 10 operating system. Despite the new hardware and new platform, consumers and businesses weren't impressed. In its most recent quarterly report, BlackBerry revealed that it sold just 2.7 million BB10 smartphones. That number was at least one million fewer than investors expected. Some investors called the rollout of these two devices a "disaster."

"Were we perfect at the launch?" responded Heins. "Probably not. Was it a disaster? I don't think so." Heins admitted that it learned some hard lessons with the Z10 and Q10 launches, but passed blame of lackluster sales to its carrier partners. Heins accused the carriers of "opportunistic thinking" because they spent their marketing dollars promoting the Apple iPhone and Samsung Galaxy S4 rather than the Z10 and Q10.

[ Analysts say the Q10 is selling well. See BlackBerry's Turnaround Hinges On Q10. ]

Heins asked for patience from investors. "We obviously did not deliver what many analysts and investors expected in the short term," said Heins. "We're driving night and day to deliver improvements." He noted that the company is still in the early stages of its turnaround efforts and that there's plenty more work to be done.

There were a few bits of news to come from the meeting.

First, the shareholders officially voted on and agreed to change the company's name from Research In Motion to BlackBerry. The name change was first proposed in January.

Second, two board members, John Wetmore and John Richardson, won't seek re-election to the board. Both have been with the company for a long time. BlackBerry didn't immediately name replacements for the two departing board members.

Third, BlackBerry confirmed that it will bring another BlackBerry 7 device to market this year. Though the company mentioned these plans casually earlier this year, this week's confirmation was more concrete. It will probably be the Bold 9720 that's been making its way through the rumor mill.

Fourth, the company let go of its head of sales for the U.S. following the weak debuts of the Z10 and Q10. Richard Piasentin, a VP with the company, was fired last month. The company is also planning more layoffs. It didn't say how many, but the company let go as many as 5,000 employees in 2012.

Last, BlackBerry said to expect about eight more smartphones through 2014. At the moment, it is selling the Z10, Q10 and Q5, all of which run BlackBerry 10. The company is expected to debut a successor to the Z10 before the holidays.

Perhaps the most troubling aspect of the meeting is that BlackBerry didn't provide any clear indication of how it expects to achieve its goals. Quite simply, it needs to sell more devices, and it offered no evidence of its plans to accomplish that feat.

About the Author

Eric Zeman

Contributor

Eric is a freelance writer for InformationWeek specializing in mobile technologies.

Never Miss a Beat: Get a snapshot of the issues affecting the IT industry straight to your inbox.

You May Also Like


More Insights