BlackBerry Gets Out the Knife to Ready for Sale - Wall Street Journal

It should come as no surprise that BlackBerry Ltd. is cutting staff, but its reported plans to lay off nearly half its employees means the beleaguered smartphone maker likely has thrown in the towel and is preparing itself for a sale. "It's just basically the standard wind down of a company that's not going to exist for very much longer," said Michael Genovese, a managing director at MKM Partners. "It's sad, but it's been inevitable now for a couple of years." Earlier this month, The Wall Street Journal reported that BlackBerry plans to run a fast auction process that could be wrapped up in a few months, following on the company's announcement in August that it formed a special committee to "explore strategic alternatives." Mr. Genovese said any buyer probably won't continue BlackBerry's phone-making business, so it appears the company is already doing the hard work of cutting its manufacturing and operations to make itself more attractive to a suitor. Buyers would probably want to focus instead on BlackBerry's intellectual property, software, enterprise and customer base, and service revenues, he said. The Waterloo, Ontario, company's travails have been well documented. It once controlled more than half of the U.S. market for phones that handle email and Web-browsing. Now it has less than 3%, according to research firm IDC. BlackBerry bet the house on two new models — the all-touch-screen Z10 and the keyboard-equipped Q10 released earlier this year. The phones flopped, never catching on in North America. Anil Doradla, an analyst for William Blair, said BlackBerry sank an enormous amount of its resources into that new line of phones and the latest cuts are an admission that effort wasn't going to work. "It clearly indicates that their attempts with their BB10 platform has been a failure," he said. "There's no second way of putting it. It's a failure and now part two of the saga begins." He said the company would either sell itself or slim down and remain as a standalone company, but focus on exploiting its current portfolio instead of spending heavily expansion projects. A company representative wasn't immediately available to comment. BlackBerry, which had 12,700 employees as of March, swung to a $646 million loss last year as its revenue plunged 40%, to $11 billion. Last year, Chief Executive Thorsten Heins pushed forward a broad cost-cutting initiative meant shave $1 billion off the company's books, laying off several thousand employees and shuttering several manufacturing sites. via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNGCyge8yhYqdM91uVrbcf3gtvdAWQ&url=http://stream.wsj.com/story/latest-headlines/SS-2-63399/SS-2-331313/

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