BlackBerry Ltd (NASDAQ: BBRY)
BlackBerry is having a rough time in the market, and has been for quite some time. However, the declines seem to be getting steeper. After announcing layoffs earlier this week, the company’s stock has tanked quite a bit. Today, we’ll talk about the layoffs, how the market reacted to the news, and what we can expect to see from BBRY moving forward. So, let’s get right to it…
BBRY Sends Employees Packing
On Friday of last week, it was reported that 1,000 employees had been fired at BBRY. This claim was made by Mobile Syrup. Since then, BlackBerry has confirmed that it is in the midst of large-scale job cuts. However, the company did not confirm that 1,000 employees were let go. Instead, BBRY said that the job cuts had an impact on about 200 employees. While 200 is far better than 1,000, investors are still very concerned about what the job cuts mean for the company. Nonetheless, BlackBerry explained that the job cuts were part of a plan to capitalize on growth opportunities and sustainable profitability across all parts of the business. In a statement, the company had the following to offer…
“As BlackBerry continues to execute its turnaround plan, we remain focused on driving efficiencies across our global workforce… For those employees that have recently left the company, we know that they have worked hard on behalf of our company and we are grateful for their commitment and contributions…”
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How The Market Reacted To The News
As investors, we have learned that any time news is released about a publicly traded company, we can expect to see a reaction in the market. Unfortunately, investors are taking the job cuts as bad news. So naturally, we’re seeing poor movement surrounding BBRY in the market. Currently (12:54), BBRY is trading at $6.47 per share after a gain of $0.17 per share or 2.56% so far today.
What We Can Expect To See Moving Forward
Moving forward, I have a relatively mixed opinion of what we can expect to see from BBRY. In the short term, I’m expecting to see a bit more volatility as investor concerns prove to be a driving factor. However, in the long term, my outlook is quite a bit different. In fact, I’m expecting to see overwhelmingly bullish activity in the long run. The reality is that while it’s upsetting that so many employees have lost their jobs, job cuts aren’t always a bad thing on a corporate level. In fact, in many cases, it has been proven that less is more! It is not uncommon for a company to perform job cuts in an attempt to set the stage for sustainable growth.
With that said, there is one big reason to expect to see growth in BBRY. While the company has struggled to sell its smartphones as of late, I believe that these struggles are likely to come to an end. The reason for this is that BlackBerry has made the decision to use Android operating systems in its most recent line of smartphones. This plan has proven to work with the Priv. In fact, Priv sales were so large that BBRY ended up having to delay shipping dates. As long as the company continues to follow the path of using a popular operating system, I’m expecting to see sales climb and the stock follow.
What Do You Think?
Where do you think BBRY is headed moving forward? Let us know your opinion in the comments below!