BlackBerry 'planning massive layoffs'

Updated: 
Troubled Canadian smartphone manufacturer BlackBerry may be planning to cut as many as 40 percent of its staff by the end of the year, in an attempt to return to profitability.

According to the Wall Street Journal, the layoffs will come in several waves and will affect all departments. However, they may be concentrated particularly in Canada as the company moves more of its operations to its biggest market, the US. Over the last two years, it has already slashed staff numbers from 17,000 to 12,700.

"We will not comment on rumors and speculation. As previously stated, we are in the second phase of our transformation plan," says BlackBerry in a statement. "Organizational moves will continue to occur to ensure we have the right people in the right roles to drive new opportunities in mobile computing."

BlackBerry has been seeing its market share fall consistently over the last two years, with the market now dominated by Samsung, Apple and Android phones. It now accounts for just 2.4 percent of sales across the big five European markets and 1.2 percent in the US, according to market research firm Kantar Worldpanel ComTech. It has reported an operating loss for the last six quarters running and is expected to make a loss this quarter too.

The company recently said that it is considering looking for a buyer, either as a whole or - more likely - in several parts. It has valuable patents and software - most notably BlackBerry Messenger - and cash reserves, but a sale could see the handset division shut down.

"The board has hinted at several key opportunities: turning the company's BlackBerry Messenger product into a broader social platform, expanding the company's mobile device management (MDM) capabilities, and pursuing the broader M2M [machine to machine] space," says Jan Dawson, chief mobile analyst at consultancy Ovum.

"However, none of these seems likely to deliver the kind of revenue growth needed to offset declining device revenues. In addition, it is unclear whether a joint venture or even a change of ownership will solve this fundamental problem."

The report coincides with the launch of the BlackBerry Z30, a new smartphone with a larger, five-inch display and a promised battery life of two days. It runs on a 1.7GHz processor with quad-core graphics designed to speed up web browsing and is pitched primarily at the corporate market that was once the company's stronghold.

Five of the most fascinating companies

Five of the most fascinating companies