The acquisition of BlackBerry with 4500 people losing their jobs

The acquisition of BlackBerry with 4500 people losing their jobs


New technologies

After severe revenue losses, a minority shareholder offers to buy BlackBerry for 4.7 billion dollars, avoiding conflicts of interest. The end of consumer telephones also marks the dismissal of 4500 employees.

Launched in the 1980s, the Canadian company, Blackberry has known better days. Since the arrival of competing smart phones, in particular the iPhone, its sales have gradually fallen. During the second quarter of 2013, the Group lost more than 265 million dollars. Having reached a dead-end, the Directors have just given their agreement to sell all shares to the Fairfax Company

The investment company specialised in insurance, intends to buy all the Group's shares at 9 dollars each, for a total of 4.7 billion dollars, and to become a private company. Whilst the investment is enormous, it is not sufficient for 40% of BlackBerry's employees to keep their jobs, and more than 4500 people will be laid off after the possible takeover by Fairfax.

Fairfax wants to give the pioneer of the smart phone a boost, but not for the general public. The war declared between its competitors, Apple, Samsung and Microsoft hasn't left much space for Blackberry in the mobile phone sector (8% of sales of smart phones). So BlackBerry intends to abandon this sector of activity to focus exclusively on products for professionals. 

Avoid conflicts of interest

Other purchase proposals are expected before 4 November, when BlackBerry must transfer its structure to Fairfax. For the moment, this minority investor only owns 10% of the capital, but intends to capture it fully. Since August, Prem Watsa, director of Fairfax, has stood down from BlackBerry's Board of Directors to avoid any conflicts of interest, in anticipation of the future transaction. 

It should be remembered that Mike Lazaridis, CEO and founder of BlackBerry, was ejected from the Board of Directors in January 2012. To recover his company, Mike Lazaridis is negotiating with investors and may present a purchase offer before the deadline. In addition, the Chinese company, Lenovo, wanted to acquire BlackBerry a short while ago.

News written by the team of The-shops.co.uk The-Shops.co.uk

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The acquisition of BlackBerry with 4500 people losing their jobs