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BlackBerry sees loss of $950M to $995M, will cut 4,500 jobs

The company released early financial results, and they look pretty terrible.

BlackBerry CEO Thorsten Heins.
BlackBerry CEO Thorsten Heins.
Sarah Tew/CNET

BlackBerry said on Friday that it expects to lose $950 million to $995 million in the fiscal second quarter and announced a change in strategy amid continued struggles selling its new BlackBerry smartphones.

The company said it would shift its focus toward business and the "prosumer" market, a concession that its BlackBerry 10 smartphones can't compete in the brutal market for consumer smartphones. As part of the change, the company is reducing its smartphone portfolio from six devices to four: two high-end devices and two more-affordable models.

BlackBerry expects revenue of $1.6 billion, but the sales figure was worrisome. The company shipped 3.7 million smartphones, a majority of which were made up of the older BlackBerry 7 devices. That's bad news for a company that bet its future on the success of its next-generation BlackBerry 10 platform. The company said 5.9 million smartphones were purchased by consumers.

The company also plans to cut 4,500 jobs, leaving it with 7,000 positions. It expects to reduce its operating expenses by 50 percent by the end of the fiscal first quarter in 2015.

The loss is so heavy because BlackBerry is taking a charge of $930 million to $960 million to reflect a write-down on unsold BlackBerry Z10 smartphones (the Z10 will be moved down to its new low-end phone with the debut of the Z30). It will also include another charge of $72 million to account for continued restructuring efforts.

Excluding the charges, the company expects an adjusted net loss of $250 million to $265 million, or 47 cents to 51 cents a share.

Wall Street analysts, on average, expected a loss of 15 cents a share and revenue of $3.06 billion.

The company ended the second quarter with $2.6 billion.