Corporate Streamlining
BlackBerry (NYSE:BB) has announced plans for additional layoffs as it pushes ahead with the restructuring of its cybersecurity business. This decision comes as the Canadian tech company pursues the separation of its two core divisions, with the goal of achieving an annualized net profit improvement of $100 million.
Strategic Staff Reduction
The latest round of job cuts, which is in addition to the ~200 layoffs initiated last quarter, will be predominantly concentrated within the cybersecurity business division. The company anticipates that these layoffs will result in annualized cost savings of approximately $27 million.
Cost-Cutting Measures
Alongside the workforce reduction, BlackBerry (BB) is targeting annualized run rate savings of approximately $20 million within its general and administrative functions. To achieve this, the company has closed six of its 36 global office locations, including its San Ramon, California office, with an expectation of generating annualized savings of nearly $7 million.
Financial Implications
The company anticipates that these measures will enable it to maintain a positive net cash position throughout the upcoming fiscal year, with an aim to achieve positive operating cash flow by the fourth quarter of fiscal year 2025.
Leadership Appointments
BlackBerry has made key appointments for both of its divisions, including chief financial officers, chief people officers, and general counsel. Additionally, management consultancy Alvarez & Marsal has been engaged to provide support during the separation process.
Performance Outlook
Furthermore, BlackBerry (BB) has reiterated its Q4 total revenue outlook of $150–$159 million, as compared to the consensus estimate of $153.28 million. The company also anticipates the stabilization of cybersecurity ARR sequentially in the current quarter.
Strategic Shift
In December, BlackBerry (BB) announced the full independence of its IoT and cybersecurity units as standalone divisions within the company. The company also stated that it would no longer pursue subsidiary IPOs for its IoT business.
