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Report: BlackBerry To Slash Workforce
Report: BlackBerry To Slash Workforce

By Barry Levine
September 18, 2013 2:34PM

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The company insists it's headed in the right direction -- new products are expected to be released later this year, and BlackBerry has been discussing the possibility of licensing its platform. The new layoffs may make the Canadian smartphone maker ripe for a buyout from the likes of Silver Lake Partners.

The hammer appears to be ready to come down on BlackBerry. The beleaguered mobile device maker is reportedly gearing up to cut as much as 40 percent of its staff by the end of 2013.

A story in Wednesday's Wall Street Journal, citing "people familiar with the matter," said that the layoffs will take place in every department, will occur over several rounds, and will probably affect several thousand employees.

A BlackBerry spokesman told the newspaper that "organizational moves will continue to occur to ensure we have the right people in the right roles to drive new opportunities in mobile computing." The company has declined to comment directly about the report of the massive layoffs.

According to its most recent disclosure in March, the company had nearly 13,000 employees, already a substantial reduction from the 17,000 in its workforce in 2011.

"Strategic Alternatives"

In the quarter that ended June 1, Blackberry showed a loss of $84 million, and it expects to report another operating loss soon. In order to tighten its belt in the face of its dwindling fortunes, BlackBerry initiated some layoffs this summer, although nothing of the scale that is now reportedly being planned.

In August, the Canadian smartphone maker announced it had formed a special committee to explore "strategic alternatives," including the possibility of selling the company. Other possible alternatives include joint ventures or alliances.

In January, BlackBerry launched its delayed but much-awaited BlackBerry 10 platform, as well as several devices using the new OS. But stock prices have fallen nearly 20% this year, and its market value is about $4.8 billion, compared to $84 billion at its highest point in 2008.

Chief Executive Thorsten Heins has been insisting the company is headed in the right direction, new products are expected to be released later this year, and BlackBerry has been discussing the possibility of licensing its platform.

Silver Lake/Dell?

One possible acquirer, Silver Lake Partners, may now be in a better position to buy BlackBerry. The smartphone maker has reportedly been in talks with Silver Lake about a joint effort in enterprise computing. But there has also been speculation that, if Silver Lake was successful in its struggle to take computer maker Dell private, it might be interested in bringing BlackBerry aboard to become Dell's new mobile wing.

Last week, Dell's shareholders approved a $25 billion buyout proposal from Silver Lake Partners and company founder Michael Dell to take the company private. In the announcement following the approval, Dell said that his company will return to its entrepreneurial "roots."

At the moment, Dell does not have a major presence in the critical arena of mobile devices. Additionally, Dell has been focusing in recent times on the business market, even as it maintains its consumer presence -- a dual approach that parallels BlackBerry's base in the business world, even as it necessarily looks to maintain a consumer presence.

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