Bloomberg News

BlackBerry Said to Prepare for Departures amid Tougher Goals (1)

July 12, 2013

BlackBerry Said to Prepare for Departures as Tougher Goals Set

Sales consultant Geoffrey Newsome prepares to install a BlackBerry Q10 for display at a Bell Canada retail location in Toronto. Photographer: Galit Rodan/Bloomberg

BlackBerry Ltd. (BBRY:US) is preparing for an increase in executive departures as retention bonuses expire and Chief Executive Officer Thorsten Heins sets tougher targets that put managers’ jobs on the line, according to a person familiar with the Canadian smartphone maker’s plans.

One-year incentive packages offered starting last July to help get the company’s new BlackBerry 10 phones and software built and delivered on time are expiring, said the person, who asked not to be identified because the matter is private. Heins is also establishing goals for phone sales, subscriber growth and product development, the person said. Managers failing to meet the figures will face termination, the person said.

The renewed pressure on jobs comes after BlackBerry fired 5,000 workers last year to squeeze out $1 billion in operating costs. Analysts had expected the cutbacks to help the company post a profit last quarter. Instead, BlackBerry lost $84 million, dragged down by sluggish sales of its new Z10 touch-screen phone. The company is projecting another loss for the current quarter.

Heins still views BlackBerry as too bloated in some areas, especially as its new operating system has now been built, so the company is also looking to shed staff through attrition, the person said.

App Goals

The targets established by Heins also cover growth in applications for the new BlackBerry 10 platform and deadlines to deliver new devices to carriers for testing, and apply to managers, who represent about 10 percent of BlackBerry’s employees, said the person familiar with the matter.

The company, based in Waterloo, Ontario, now has about 12,700 employees. The person declined to say how many jobs might be affected by the actions.

Adam Emery, a spokesman for BlackBerry, declined to comment on staffing decisions.

Sales of the Z10, introduced in January, missed analysts’ estimates by nearly a million units, contributing to last quarter’s loss. Best Buy Co. (BBY:US) has cut the price of the Z10 to $49.99 from $199.99 with a two-year contract.

The current belt-tightening program, called Polaris, is about “really trimming and slimming the organization,” Heins told reporters at the company’s annual meeting on July 9.

“It’s not like X thousand people have to go,” he said at the time.

Stock Decline

BlackBerry plunged the most in 13 years after the company disclosed on June 28 that sales and profit numbers that missed analysts estimates. The shares have tumbled 36 percent since that report. Today, BlackBerry shares fell 1 percent to $9.24 in New York.

BlackBerry said this week that its head of U.S. sales left the company last month. Richard Piasentin, who was based in Waterloo, wanted to stay in Canada, so BlackBerry is now looking to replace him with a U.S.-based sales chief, the person familiar with the matter said. His post is not being eliminated, the person said.

Two other executives, T.A. McCann and Marc Gingras, have also left the company, BlackBerry said this week, without saying when they departed.

To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net


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Companies Mentioned

  • BBRY
    (BlackBerry Ltd)
    • $9.85 USD
    • 0.10
    • 0.96%
  • BBY
    (Best Buy Co Inc)
    • $30.75 USD
    • 0.84
    • 2.73%
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