BlackBerry Adopts One Strategic Alternative: Fire People

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Smartphone maker BlackBerry Ltd. (NASDAQ: BBRY) fired an unspecified number of its U.S. sales staff on Monday, according to The Wall Street Journal’s Digits blog. The move follows the July firing of its U.S. sales vice-president, and although the company did not say so, it very likely intends to continue to slim down its workforce as it searches for that elusive strategic alternative that will save BlackBerry from oblivion.

The company’s stock got a boost yesterday following reports that former BlackBerry board member Prem Watsa has rounded up billions of dollars in backing from the Canada Pension Plan Investment Board to rescue BlackBerry from itself. Watsa is the chairman of Fairfax Financial Holdings, which is BlackBerry’s largest shareholder, with a 10% stake in the company.

Watsa left BlackBerry’s board last month after the company said it was exploring strategic alternatives, including a possible sale of the company. At the time he cited a potential conflict of interest as his reason for leaving, ginning up chatter that he would make a bid for the phone maker.

If Watsa or anyone else makes a bid for BlackBerry, the company’s workforce of around 12,000 people certainly will be cut dramatically. BlackBerry chopped 5,000 staff last year, and there is no way its fading market share can support its current staffing level. Cuts to the sales force are very good indicators of more cuts ahead.

Shares rose 6.4% on Monday to close at $11.53, following the reports of Watsa’s possible bid. Tuesday morning the shares are trading down nearly 3% at $11.20 in a 52-week range of $6.22 to $18.32.