Smartphone maker BlackBerry on Friday confirmed that will sack 4,500 employees as the company is expected to post around $1 billion loss in the three months to August on disappointing sales of new phones. It could not compete with Samsung and Apple in the smartphone space.
BlackBerry Z10 and Q10 did not find enough takers in the global mobile makers. The Ontario-based phone maker will report $1.6 billion revenue in the quarter against analysts forecast of $3 billion.
BlackBerry, which is looking for a buyer, has shipped 3.7 million smartphones, its lowest since summer of 2007, when the first Apple iPhone came out.
The release says 5.9 million BlackBerry handsets were sold to end users but only 3.7 million were being recognized in revenue because 2.2 million of these sales came from inventory shipped in the first quarter.
Its total losses in the past seven quarters will be around $1.8 billion.
Microsoft’s acquisition of Nokia this month effectively left the Ontario-based company in the cold.
Though Canada’s Fairfax Holdings is believed to be trying to put together a private equity buyout, others think it will be sold off piecemeal.
Apple launched its two latest iPhones yesterday, which analysts were predicting could sell 5m in the opening weekend.
BlackBerry’s firings follow the loss of 5,000 jobs last year and a smaller round of redundancies this summer. The new losses will reduce Blackberry’s 12,700-plus global workforce by about 40 percent. Expenses will be cut by 50 percent 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 over 14 percent of the US smartphone market in 2011 but, according to research firm IDC, it now has under 3 percent. Once the market leader, it now trails in fourth place behind Microsoft’s Windows Phone brand, devices powered by market leader Google’s Android system and Apple.
Thorsten Heins, BlackBerry chief executive, told Bloomberg in April that the Q10 could sell tens of millions. So far the figure appears to be below 5 million units, The Guardian reported.
Some U.S.-based analysts are trying to paint a rosy picture about BlackBerry performance.
In Q1 of this fiscal year, BlackBerry reported sales of 6.8 million handsets of which it says 40 percent were BB10 devices. It says 2.2 million of those sales were into inventory but were not sold through to end users until this quarter.
It also says most of the 3.7 million units it recognized as revenues were BB7 devices, say 3.6 million. BB7 sales decline from 4 million in Q1 to 3.6 million in Q2.
BB10 devices finally start to take off, selling 2.3 million of the 5.9 million units taken up by end users, almost 4 times the number sold to end users in Q1.