Lazaridis prepares rival bid for BlackBerry as mass layoffs begin
Friday, October 11, 2013/
BlackBerry co-founder Mike Lazaridis has increased his stake in the embattled Canadian smartphone maker and has engaged the services of a major investment bank, as the first workers were made redundant in the company’s latest round of layoffs.
The Globe and Mail is reporting on early job losses as part of the company’s massive restructuring program, which will see 40% of the company’s workforce or around 4500 jobs cut.
The company is retrenching 300 employees from its headquarters in Waterloo, Ontario, with cuts also already taking place in the company’s international subsidiaries in recent weeks.
Meanwhile, Reuters reports Lazaridis now controls 8% of the company, up from the 5.7% he held at the end of 2012, with the tech entrepreneur also engaging the services of investment bank Goldman Sachs and private equity firm Centerview Partners ahead of a possible bid.
Lazaridis, along with fellow chief executive Jim Balsillie, stepped down from the helm of the smartphone giant in January 2012 following weeks of speculation about a change in management team in favour of current chief executive Thorsten Heins.
The resignation came after the company announced delays to smartphones running its new touchscreen-based Blackberry 10 operating system, which did not end up shipping until a year later.
His fellow chief executive, Jim Balsillie, notoriously criticised Apple over its app store model in 2010, creating a popular perception the company’s management team was out of touch.
“You don’t need an app for the web. We believe you can bring the mobile to the web, but you don’t need to go through some kind of control point,” Balsillie said.
In August, Blackberry announced the creation of a special five-member committee to look at possible sale options for the embattled smartphone maker, with directors hoping to wrap up any sale by November.
A consortium led by Prem Watsa’s Fairfax Financial Holdings, which owns nearly 10% of the company, has signed a letter of intent to buy BlackBerry for $US4.7 billion, although there is a possibility the company could be broken up with Canadian foreign investment laws reducing the likelihood of a serious foreign bid.
The sale comes amid quarterly losses of nearly $US1 billion, large layoffs, slow sales of its Z10 smartphones and ongoing delays to the release of its BBM messenger app for iOS and Android.