BlackBerry announced it is laying off 4,500 employees worldwide as it reported second-quarter revenues of $1.6 billion instead of their forecast of $3 billion. The news could not have come at the worst time for BlackBerry as it seeks to find a buyer for its business.
As the bad news reverberated around the world, investors’ confidence in the ongoing survival of BlackBerry caused the share price to plunge just over 16 percent as the stock is last traded on the TSE at $9.08. As the smartphone market is becoming ever more competitive with Apple and Samsung dominating the industry, new players from Microsoft (Nokia), Huawei, Lenovo, Xiaomi and many more are all fighting for market share leaving BlackBerry with little room for errors in their business.
Unfortunately, the management team has not helped their business by making bad decisions from announcing that the company is for sale publicly, instead of privately. Of course when loyalists and potential buyers who are considering BlackBerry smartphones will likely think twice as they probably wonder whether BlackBerry will be there when they need them.
And even when they had momentum going for them shortly after the launch of BB10 and the new smartphones, they managed to squander good press coverage by not being relevant with the public. Instead of aggressively trying to market their products through different channels, strong promotional activities, and roadshows in stronghold cities, they quietly sat back and watched as their rivals trumpeted their products and services. It is as though they gave up even before trying to make a comeback.
Selling to their corporate base is the right thing to do, but pushing their products to the general public is as crucial as acceptance by the general public leads to mass appeal and BlackBerry needs to be winning on both fronts. However, despite the grim news, management can still come up with a turn around plan by selling the excess inventories that they’ve written down by about $1 billion at rock bottom prices. The last time they did that with their tablets, many people were buying as the BlackBerry brand is still a strong brand. Right now BlackBerry’s job is to get those devices in the hands of as many people as they can.
Live or die, BlackBerry third attempt at a turnaround, although on life support, is possible, but they either have to fire the marketing department or bring in someone who is not afraid to push the envelope and get the BlackBerry back in the public sphere as there are still many loyalists out there, true BlackBerry addicts who need to hear the war cries — just make sure it is not Thorsten Heins as his public appeal is zero.