Can Retrenchment Really Save Blackberry?

It looks to me like the last throw of the dice. A final attempt to cut costs, stem rising losses and rationlise a business so that a buyer can be found - even in its current distressed state. But will the announcement of 4,500 job losses be enough to save Blackberry?

How the mighty are fallen! Blackberry made what John Kay rightly describes as "the defining business product of the first decade of the 21st century". Once seen as so habit-forming its users dubbed it the "CrackBerry", Blackberry has suffered a calamitous decline as rivals like Apple, Samsung, HTC, Hauwei, Sony and even Nokia revolutionised the smartphone business it did so much to start.

Blackberry has announced it is planning to cut 4,500 jobs, or 40% of its worldwide workforce, in an attempt to staunch huge losses. Announcing the move, CEO Thorsten Heins said:

"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."

Blackberry's revenues for the three months to June 2013 were only $1.6bn against analysts' forecasts of $3bn – indicative of an almost complete collapse in its business. New phone launches have failed. Customers are deserting Blackberry in their droves. It is hard to see a way back.

Blackberry has confirmed that it will “refocus” on the enterprise and ‘prosumer’ – professional consumer – market and restructure its workforce with the aim of reducing operating expenses by approximately 50 per cent by the end of the first quarter in 2015.

Blackberry's future smartphone portfolio will be reduced from six devices to four, which will be designed for business customers and include two high-end devices and two entry-level devices. But of course that assumes that Blackberry lasts much longer.

Blackberry has reported total losses in the past seven quarters of $1.8bn, putting its viability as a going concern into question. It needs to find a buyer quickly - very quickly.

Video update (Financial Times, June 2014)