BlackBerry has confirmed it will cut 40% its global workforce as it said it expects to report that it has lost almost $1bn in its second quarter.
The smartphone company said it will lay off 4,500 employees as it tries to slash costs by 50% and shift its focus back to competing mainly for the business customers most loyal to its brand.
The Canadian-based firm had been scheduled to release its net earnings for the quarter next week but warned on Friday that it expects to post a staggering loss of between $950m and $995m.
Shares in the company plunged as low as $8.01 when the stock reopened for trading on Friday, before closing down 17% at $8.72.
Thorsten Heins, president and CEO of BlackBerry, said in a statement: “We are implementing the difficult, but necessary operational changes announced today to address our position in a maturing and more competitive industry, and to drive the company toward profitability.
“Going forward, we plan to refocus our offering on our end-to-end solution of hardware, software and services for enterprises and the productive, professional end user.”
BlackBerry said last month that it would consider selling itself and reiterated on Friday that a special committee of its board of directors continues to “evaluate all options”.
The BlackBerry, pioneered in 1999, was the dominant smartphone for on-the-go business people and other customers before Apple debuted the iPhone in 2007. Since then, BlackBerry has been hammered by competition from the iPhone as well as Android-based rivals like Samsung.
In January, the company unveiled new phones running a revamped operating system called BlackBerry 10. The Z10 and Q10 were designed to better compete for customers and rejuvenate the brand, but BlackBerry’s market share continues to lag behind its rivals.
BlackBerry, formerly known as RIM, was once Canada’s most valuable company with a market value of $83bn in June 2008.
Canada’s industry minister James Moore said in a statement: “Our thoughts are with those who have lost their jobs at BlackBerry, it is always a cause for concern for our Government.”