Blackberry cuts its losses

by | Oct 21, 2016 | Biz/Tech

Sulaiman Akbari


One of Canada’s biggest high tech companies ever — BlackBerry — is pulling the plug on making smartphones.

BlackBerry announced last month that it would no longer design and manufacture smartphones, but instead outsource their phone production.

The move is in part to stem Blackberry from hemorrhaging cash.

The company noted last month a US$335 million loss when it reported its second 2017 quarterly results. That follows a US$655 million loss in generally accepted accounting principles (GAAP) in the first quarter of its 2017 fiscal year, as reported by the company in June.

First-year Humber College civil engineering student Chris Colantonio, 17, said the decision hurts BlackBerry’s reputation as a Canadian company.

“It seemed like BlackBerry couldn’t handle the pressure from other competitors,” he said. “Their brand and rep to stay truly Canadian took a hit.”

Robert Cinapri, Humber program coordinator of Business Administration – Accounting, said the damage was done before the Waterloo, Ont., based company decided to outsource their handsets.

“The damage has been done, BlackBerry was unable to compete with Apple and Samsung any more,” he said.

Apple and Samsung were BlackBerry’s top competitors a few years ago but with its stock value dropping by a total of 60 per cent in the last five years, it was clear BlackBerry couldn’t keep up.

First-year Humber advance special needs student Sila Aryan, 21, said she gets why BlackBerry is no longer in the game.

“It’s brutal to see BlackBerry go down like that but it’s understandable,” she said. “They couldn’t keep up with consumer needs.”

Cinapri said BlackBerry’s focus was not on consumer needs but with their image’s needs, which led BlackBerry to collapse like they did.

“They’re never going back to what they once were when they biggest tech company out there,” he said. “Their focus now is to keep their software and security needs better.”

BlackBerry is renowned for the security system on its devices but its software appears to be behind, and that is what the company is going to focus on more.

“It will be difficult for those employees to find another job like that,” said first-year Multimedia Design and Development student Harmen Singh, 19. “Technology has become so advanced that companies may not need them.”

BlackBerry cut 100 employees in the hardware department when it decided to outsource. Cinapri said this was expected.

“The job cuts were coming because of how poorly they were performing in the hardware department,” he said.

Aryan said that at the end of the day, it was a good decision to outsource.

“Cutting those employees was a business decision,” Aryan said. “BlackBerry still wanted to be in existence so they wanted to keep the brand alive.”

Cinapri said BlackBerry can now put their focus on what it prides itself in and focus less on designing and manufacturing handsets.

Aryan, Singh, and Colantonio all agreed BlackBerry failed to keep up with technology trends as well as consumer needs.

Having a BlackBerry in hand was once a trend, but appears to no longer be a status symbol.