Jets And Job Cuts: BlackBerry’s Paradox

By on September 26, 2013

It has been revealed the ailing smartphone maker bought a private jet just before it announced a near $1bn loss.

Sympathy for embattled BlackBerry executives took a nose-dive this morning when it was revealed executives spent an estimated $20m on a private jet for the company, in the same quarter it revealed a near $1bn loss and swathes of job cuts.

The 4,500 employees due to lose their jobs at the company will find little solace in the knowledge their executives will be sitting comfortably in their Bombardier Global Express jet, as they clear out their desks.

The addition to BlackBerry’s fleet was delivered in July, the middle of its disastrous second quarter, just before it revealed its $995m operating loss. The sense of ‘we’re in this together’ is clearly lost on BlackBerry’s upper echelons.

The company has defended itself saying the new set of wings was bought to replace two aircraft, which the company intended to sell (it still hasn’t sold them). Regardless of this perceived ‘downsizing’, the decision to buy the jet at all has led to further criticism of the phone makers’ decision making.

‘Several years ago, the company bought two medium-range Dassault aircraft,’ BlackBerry said in a statement.

‘Earlier this year the company decided to sell both planes and replace them with one longer-range aircraft. The company considered several options and selected a used Bombardier aircraft, which was eventually delivered in July.’

Since the revelation came to light, the company has announced it will be selling all of its aircraft. A tad reactive rather than proactive we’d say.

‘In light of the company’s current business condition, the company has decided to sell that aircraft along with the two legacy aircraft and will no longer own any planes,’ it said.

It’s probably a wise move considering the company has announced it will seek to cut operating costs by 50%. The company will write down nearly $1bn in unsold phone inventory after its latest line of phones flopped. It’s a big switch of fortunes for the company which was once nicknamed CrackBerry, due to the handsets’ addictive nature. Oh how the mighty fall.

Adding to its handset sales woes today, the company’s anticipated BlackBerry Messenger apps, which were launched at the weekend, have been ‘paused’ due to logistical problems. It looks like nothing is going right, but with the jet revelation fresh on people’s minds, the company might struggle to find compassion.

With the negative attention now being paid to the company it’s more a case of FlackBerry than CrackBerry.

http://www.managementtoday.co.uk/news/1212933/jets-job-cuts-blackberrys-paradox/

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