As a consequence of the more intense competition the company is experiencing in its hardware business, it expects to report a primarily non-cash, pre-tax charge against inventory and supply commitments in the second quarter of approximately $930 million to $960 million, which is primarily attributable to BlackBerry Z10 devices.As a result of the substantial charge, the company expects to post a net loss upwards of $995 million – just a hair under $1 billion. According to the Wall Street Journal, analysts were expecting the company to post a net loss of around 15 cents a share, compared to its estimated loss of what will be upwards of 51 cents a share when the company formally reports its second quarter results on Sept. 27.
BlackBerry to Cut 40 Percent of Workforce, Revenues to Plummet
BlackBerry dealt a blow to its employees and investors Friday, announcing it will slash 40 percent of its workforce as its revenue is anticipated to fall to roughly half of where it was a year ago. The announcement came after days of speculation that the smartphone maker would announce such news. The struggling smartphone maker said it will cut 4,500 employees, as it seeks to reduce its operating costs by approximately 50 percent between now and the end of its fiscal first quarter, which will be in June 2014. "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," Thorsten Heins, BlackBerry CEO, said in a statement. BlackBerry also noted it expects to generate roughly $1.6 billion in revenue in its fiscal second quarter, which is just over half of the $2.9 billion it raised a year ago. Analysts, meanwhile, were expecting the smartphone maker to generate a hefty $3.1 billion of revenue in the quarter, based on high expectations for sales of the company's new Z10 devices. But BlackBerry said intense competition dealt a blow to those anticipated Z10 sales. According to the smartphone maker: