Blackberry Announces Mass Layoffs, Stock Halted

Canadian phone company announces job cuts in effort to restructure its business.
6:40 | 09/20/13

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Transcript for Blackberry Announces Mass Layoffs, Stock Halted
This is this special report from ABC news. Look what I'm Dan Cutler New York because ABC news digital special reports with live coverage of the -- -- -- -- Friday. To. It was when you. What a difference -- -- after record highs on Wednesday stocks traded him to drop today retreat. The Dow closing down 165. Plus points closing at 151471. The big news of the day coming out just a short time ago regarding Blackberry Blackberry making an announcement that it would be laying off about 4500. Employees that is about 40%. Of its global workforce. That also trigger temporary stop trading of its stock today. Also reporting a one billion dollar loss for its second quarter and that driving down the value of its stock by about 20%. All coming on news that the company. Is under a massive restructuring. And of course coming on the heels as Apple's hating a huge day today with that model find this phone coming up setting up a gold rush. As far as how -- stocks that today in the NASDAQ and the S&P. As well also closing out the day. And so we see the joy of apple and -- of heartbreak. For Blackberry. I want to bring in -- had -- from Yahoo! -- as a talk about what happened at Blackberry today might this really was a big shock to the market. Yeah big -- -- -- -- -- big check a Blackberry -- no doubt given how far sales chart fell. Short of what they were expecting now they had about half the sales that Wall Street was looking forward for this quarter one point six billion dollars in revenues -- three billion dollars expected. Obviously a massive failure -- their new product push. Along with that Blackberry said essentially they're going to. Really shrink the company and lay off about a third of their employees and become an -- of a niche player what they call you know. It's catering to some some businesses as wells the prosumer markets are basically for enthusiasts and for the people in ninety. Who really like the other platform on the company still nominally at least for sale on the board is evaluating any potential options -- come along for investments. In the company or potentially -- purchase of the entire company but. Nobody really sees that on the horizon. Has the company cannot set -- specifically where these cuts are taking place or -- -- across the board kind. Now having said in terms -- the employees whether cuts going to be taking place but you know presumably it's any. Area that is not going to really fit with their new vision of the company which is not really to be a mass consumer Smartphone brand. So Mike if you can't enemy given this guides that they're trying to follow in the strategy that they're trying to its future right now -- -- going to be the biggest competitors that they're gonna have to go up against. While the -- competitors have been there I mean it's obviously. In the in the consumer market really is apple Samsung of course and really the entire. -- kind of -- -- of android based phones that are supported by the Google operating system. So it's it's kind of everybody who's already being in fact the real question is -- still sticking with Blackberry and who. Who is not really going with a competitor and that's you know some very large businesses and government dive groups that like. The -- the platform they like to security and at some people really do like the physical keyboard so it's not as if the product doesn't have any -- it all mean there are a lot of product areas in the world that have you know a niche kind of premium player that only caters people with certain taste. But that's not the way Blackberry as the company has been size and so they have larger ambitions anymore -- now the company by the way has a lot of cash on hand it's not in financial peril at the moment. But if it keeps spending in burning its cash in trying to expand the way it has been. Then obviously that -- goes away -- Look at how the stock did closer -- it is about down about 17%. Michael ask -- that is this going to be a restructuring that we follow an alliance of say IBM. Well it's not in IBM in terms of having this sort of in during installed base of customer relationships and businesses. It's a faster moving product category you know the device business is obviously. Something -- changes all the time we have these rapid product cycle so. I wouldn't say it's gonna be that kind of -- overall it's not about. You know getting new management in there and saying no let's change our cost structure and lets you know focus on. You know a handful of businesses it's kind of it was kind of -- hail Mary pass to come out this new generation. Of Smartphones he didn't really work they they tried to kind of shove out a lot of their new devices into distribution channel in the past couple of quarters and they just didn't sell through and that's been that's been a reality. And I wanted to ask you about that -- given -- front of most recent public -- obvious there's been a lot of people. Blackberry have certainly taken its share of licks from criticism from a lot of people -- -- not only consumers but also. Market watches as well but does -- -- -- is -- the tenacity of the company at how it's been able to maneuver so quickly. In such an -- job market. I would say no I'd say they actually were slow to adapt to the fact that basically Smartphones. Had become a consumer device they were used to essentially selling mass numbers of phones through corporate I T departments and keeping their relationships with that -- manager with that. Kind of enterprise. Approach and so they did not basically realize that having a dazzling device in the hands of consumers in using advertising to get at them. Was going to be the way to go they tried to belatedly adapting that respect. What it does say though is that they were such a successful. And profitable company for years and years after they basically invented. The Smartphone market could be built up a lot of financial. You know capital that a lot of money. And now they had still some loyalty it took a long time for -- the basically the customers to go elsewhere so that's why -- -- residual way they still have this money to work with and they still do have good technology people some people really do like. The software and all the rest of us it's just -- obviously. Not necessarily something that they were able to translate into buzz in the current product -- All right ABC's -- center she's being Yahoo! finance is Mike cent toll -- Mike certainly it is a Friday indeed -- breaking news obviously coming out of Blackberry thank you for your time. One let's look at the -- before we do let's ago the Dow down about a 184 points closing the week at 151451. We have -- complete report on abcnews.com. And the latest on those cuts coming to Blackberry. For now I'm -- Cutler New York with this ABC news digital special report. This has been a special report from me.

This transcript has been automatically generated and may not be 100% accurate.

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