Blackberry Sweden to Shut Down Resulting in 150 Job Losses

Blackberry may close its doors in Sweden.  The Toronto-based company announced that negotiations are underway with trade unions regarding the 100 jobs which may be lost as a result.

Blackberry produces designs for devices such as the Blackberry 10 in Sweden.  The Toronto-based company may close down its software operations in Sweden as well, which have been operating since the company’s US$92 million acquisition of The Astonishing Tribe, a user interface developer, in 2010.  At the time, Blackberry (then called Research In Motion) was the fourth-biggest player in the smartphone market, which was then still dominated by Nokia, and just two percent behind Apple in terms of market share.  In 2010, Blackberry smartphones consisted of 15% of all sales, whereas today the company only holds a 0.6% market share of all smartphone sales.

“At this time, we are considering the closure of our offices in Sweden [and] since this may impact approximately 100 employees, we are now initiating consultations with the employees’ trade unions,” said a spokesperson for Blackberry. “Our intention is to reallocate resources in ways that will best enable us to capitalize on growth opportunities across all facets of our business.”  Although most of the company’s operations are not governed by unions, they are in Europe.  According to Swedish trade union, Unionenen, Blackberry is consulting with them over closing offices which will result in 93 layoffs in the city of Malmo and another 60 in Gothenburg, placing the job loss figure closer to 150.

Under John Chen, the current Blackberry CEO, the company has been shifting its business from the smartphone market and back to its software and enterprise roots.  Blackberry has acquired Israel’s Watch Dox to build on its security software business but it appears that the company is downsizing in other departments.  This has highlighted the probability that Blackberry’s last quarter profit of US$28 million was a result of cutting costs and not an increase in revenue, signalling that the cellphone manufacturer may still be in trouble.  The company saw a US$316 million decline in revenue last quarter compared to the previous year and has laid off about 1,800 employees in the last financial year.  Blackberry employs around 7,000 people around the world.