BlackBerry, which has struggled to compete in the smartphone business, said Friday it will slash 4,500 jobs, or about 40 percent of its workforce, and expects to post a nearly $1 billion second-quarter loss.
"Today's announcement just brought the end game a lot closer," David Garrity, a principal at GVA Research, said of BlackBerry, which has been looking at strategic alternatives such as going private.
Ironically, the announcement came the same day Apple's new $199 flagship iPhone 5S went on sale and people were standing in line around the country to buy it. It was trying to compete with new advanced smartphones by Apple, Samsung and other rivals that helped put Canada-based BlackBerry in the current financial bind.
As part of a massive restructuring, the struggling company said it set targets to reduce its operating expenditures by approximately 50 percent by the end of the first quarter in fiscal 2015.
Trading in shares of BlackBerry had been halted due to "news pending" on both Nasdaq and the Toronto Stock Exchange. In the minutes after trading resumed at 3:35 pm ET, the shares plunged as much as 23 percent to $8.06, before bouncing back a bit.
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"The company has sailed off a cliff," said Collin Gillis, an analyst at BGC Partners. "What do you expect when you announce you're up for sale? Who wants to commit to a platform that could possibly be shut down?"
The company said it expects to report a second-quarter loss, excluding items, of between $950 million and $995 million next week. It expects revenue to decline to $2.6 billion from $3.1 billion a year ago.
There has been speculation about a possible sale of the company. Earlier this month, Dow Jones reported the struggling handset maker was trying to quickly auction itself off.