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Canadian cybersecurity and IoT (Internet of Things) firm BlackBerry plans to cut more jobs as it pushes toward profitability. The company hasn’t specified the number of layoffs in this round but says it will be on top of the previously announced layoffs affecting around 200 employees. It expects these headcount reductions and other measures to help it return to profitability in a year.
BlackBerry to cut more jobs to reduce operation costs
In October 2023, BlackBerry announced plans to split its IoT and cybersecurity businesses into two separate entities. The company said this move will drive it towards profitability and positive cash flow in the future. It has since taken more actions to reduce annual expenditure by approximately $50 million. Largely focused on the cybersecurity business, these actions included about 200 job cuts.
BlackBerry is now aiming for $100 million of annualized net profit improvements. It plans to achieve this target with further cost reductions and margin expansion. The firm has already identified measures that will help it achieve approximately $55 million of the $100 million annualized target. Sadly, these measures include another round of job cuts within the Cybersecurity business.
According to the company, these layoffs will help it save around $27 million in annual expenses. An additional $8 million will be saved annually through non-layoff actions. BlackBerry is also taking action to reduce its annual general and administrative expenses by $20 million. As part of this move, it has closed 6 of its 36 global offices, including one in San Ramon, California.
BlackBerry expects these measures to reduce its operating cash usage for the fourth quarter of its fiscal year 2024, which ends on February 29, 2024. The company has already seen operating cash usage drop from $56 million in Q2 to $31 million in Q3. It still ended up suffering a net loss of $21 million in the third quarter. The firm aims to become operating cashflow positive by the end of fiscal year 2025.
BlackBerry has established separate leadership teams for the two divisions
As part of its latest press release, BlackBerry announced that it has “made material progress” towards splitting the IoT and cybersecurity businesses. It has already established separate leadership teams for each division and is in the process of establishing divisional back-office teams. The two divisions had standalone Sales, Marketing, and R&D functions even when they were a single entity.
“Efficiencies have been identified in all functions, but in particular within the cost of goods sold and research and development,” BlackBerry said in the press release. “Backed by solid, industry-typical levels of R&D investment, the cybersecurity business is executing its exciting product roadmap in a focused and efficient manner.” It remains to be seen if the company achieves its financial target in the next fiscal year.
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