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Instant Analysis: BlackBerry Confirms Small Number of Layoffs

By Evan Niu, CFA - Feb 5, 2016 at 4:35PM

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The Canadian mobile-security specialist is laying off off about 200 workers, which is less than media reports had suggested.

What happened?
Following a report from Mobile Syrup that BlackBerry (BB 3.64%) would be laying off a "significant" portion of its employees at its Waterloo headquarters, the company has officially confirmed that there were some workforce reductions but much less than reported.

The initial report suggested that upwards of 35% of employees at the Waterloo headquarters could get laid off, which would have translated into nearly 1,000 workers going home without a job, in addition to a few in its Sunrise, Florida, office. BlackBerry clarified that only around 200 total employees in Canada and Florida were affected by the job cuts.

Does it matter?
The job cuts make sense in the context of BlackBerry's ongoing turnaround and strategic shift in direction. BlackBerry has been aggressively focusing its efforts of enterprise security software, and even its handset hardware strategy has changed dramatically with the adoption of Android.

Reiterating that the job cuts are less than what's being reported is important from a damage-control perspective. Shares did fall today by about 4%, but the broader market sold off quite a bit, particularly tech companies with exposure to enterprise customers. BlackBerry also pointed out that the company is still actively recruiting for talent in the other areas of its business that it expects to drive growth going forward.

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