BlackBerry (BBRY +0.61%) has had a tough time hanging on to talent lately. The company has seen an executive exodus in recent years, but now rival ZTE is "aggressively" poaching employees, according to The Wall Street Journal. ZTE is also going after Motorola Mobility employees, even as Google prepares to sell the subsidiary to Lenovo. ZTE hopes to beef up its marketing, product design, and security by hiring away from the Canadian smartphone maker.
There are several angles to BlackBerry's shrinking headcount. First, it has been voluntarily laying off staff as it seeks to reduce operating costs as part of its turnaround efforts. The company laid off approximately 40% of its staff last year. Second, morale has been low, which makes poaching easier for competitors. Previous equity grants have less retention effects now because of the declining share price.
On top of that, CEO John Chen has restructured C-suite management, replacing the CFO, COO, and CMO late last year. Chen filled those spots with several former colleagues. When Yahoo! found itself down on its luck with employee morale, it began scooping up start-ups under Marissa Mayer as its acqui-hire strategy. The big difference is that BlackBerry can't afford to go on a spending spree.
In this segment of Tech Teardown, Erin Kennedy discusses BlackBerry's talent woes with Evan Niu, CFA.
(Relevant segment begins at 9:38.)
