BlackBerry lays off 250 more employees in Waterloo
BlackBerry has confirmed it will be laying off 250 employees at its Waterloo, Ont., headquarters as it implements a plan to cut 4,500 jobs amid a period of uncertainty for the smartphone manufacturer.
In a company statement, BlackBerry says it is in a "period of transition" and cites the need to focus on its financial results to be in a better market position.
"We recognize our local employees' hard work on behalf of our company and the difficulty of this news," said the company. "We will do everything in our power to treat our employees with compassion, while offering support during this time of transition."
The cuts come as the company is restructuring with a $1-billion cash injection from investors, as well as a new executive chairman and BlackBerry has been in the process of reducing its expenses in an effort to refocus the business, a move which has included laying off 40 per cent of its staff, or about 4,500 employees.
In a deal struck with Fairfax Financial earlier in November, BlackBerry agreed to hire John Chen, known for turning around Sybase, as interim CEO and to give him a leadership role in restructuring the company.
Fairfax backed off a proposal to buy the company and take it private, but agreed to the $1-billion finance package to buy the company time to restructure.
According to the SEC filing, Fairfax committed to $250 million and the rest of the $1 billion in financing came from Mackenzie Financial Corp., Brookfield Asset Management Inc., Markel Financial, Canso Investment Counsel Ltd. and Qatar Holding LLC.
Fairfax also agreed not to sell its 10 per cent stake in BlackBerry in the next year.
Some observers have questioned whether Waterloo region will survive as a technology hub, while BlackBerry keeps cutting back. University of Waterloo economics professor Larry Smith says only people who don’t understand the region believe the area will lose its edge because BlackBerry is in trouble.
“It is cause for concern, but it does not speak to the health and viability of this marketplace at all,” he said in an interview with CBC’s Lang & O’Leary Exchange.
“One of the great myths is that this sort of environment could be created by executive fiat. That’s impossible. This community has been creating role models – we’re talking about role models of enterprise and innovation, small businesses -- we’ve been doing it for over 100 years,” he said.
Smith was a mentor to Research in Motion (later BlackBerry) founder Mike Lazaridis during his studies and says the company created, while an asset to the region, is not its backbone.
“It’s incorrect to suggest that somehow a Research in Motion created this environment. Research in Motion is a reflection of this environment and Mike Lazaridis when he was starting here had many role models after university and broadly speaking in the community.”