2024-02-13 02:34:10
Blackberry became popular with its keyboard phones, which the iPhone took away, but survives thanks to its security and Internet of Things businesses. The Canadian company, which is in the process of separating these divisions, announced this Monday that it plans new layoffs as part of the group’s restructuring process with the aim of saving costs and generating cash.
The company has called a conference with analysts to provide more details. BlackBerry adopted measures in the last quarter of 2023 that, once fully implemented, will reduce annual costs by approximately $50 million. These actions largely focused on the cybersecurity business and included cutting approximately 200 jobs.
BlackBerry now aims to improve its net profits by $100 million annually through a combination of cost reduction and margin expansion. This figure is in addition to the $50 million in annual cost savings announced last quarter. The company indicates that it has identified actions to achieve approximately $55 million of the annualized target of $100 million, which are already being implemented in the current quarter and will involve extra expenses of approximately $12 million.
The company has not announced how many layoffs the new measures imply, but it has noted that within the cybersecurity business, additional workforce reductions are expected to generate annualized savings of approximately $27 million and non-employee-related actions a increase of 8 million dollars.
Within the general and administrative expense functions, actions are being taken during the current quarter to achieve annualized savings of approximately $20 million. As part of these savings, BlackBerry has abandoned 6 of its 36 offices worldwide, including the one in San Ramon, California, which is expected to achieve annual savings of approximately $7 million. Further staff reductions are expected to result in annual savings of approximately $13 million.
BlackBerry is in the fourth quarter of its fiscal year, in which it has been consuming cash because expenses have exceeded income. The difference has been narrowing. With the cost reduction measures adopted and the anticipation of new operational efficiencies, BlackBerry expects to return to generating positive operating cash flow in the fourth quarter of fiscal year 24-25.
The separation progresses
BlackBerry is in the process of separating the Internet of Things (IoT) and Cybersecurity business units as completely independent divisions. The company scrapped plans for an initial public offering for its IoT business in December, but is still working to separate the two. He has created a project management office and appointed consultants Álvarez & Marsal to help him in the process. Chief Financial Officers, Chief People Officers, and Legal Counsel have been appointed to the IoT and Cybersecurity divisions, and management teams are being created to complement the sales, marketing, and R&D functions of each.
The company raised long-term financing last month by issuing convertible senior notes for a total amount of $200 million. With them it will face the maturity of 150 million dollars of short-term obligations on February 15. Following this repayment, BlackBerry will have reduced its debt by 45% compared to November 2023 and, with the expected return to positive operating cash flow, expects to be well positioned with a strong balance sheet, the company assures.
“The Company is fully focused and working urgently towards our objectives. We are directing our resources where we believe we can maximize profitability and continue to delight our customers. “Our balance sheet is strong following the refinancing and we believe BlackBerry is well positioned to execute our strategy,” said John J. Giamatteo, CEO of BlackBerry. through a statement.
Follow all the information about Cinco Días in Facebook, X y Linkedinor nuestra newsletter Five Day Agenda
The Five Day Agenda
The most important economic quotes of the day, with the keys and context to understand their scope
To continue reading this Cinco Días article you need a Premium subscription to EL PAÍS
_
#BlackBerry #plans #layoffs #process #separating #businesses #Companies