BlackBerry (NYSE:BB) is the latest tech company to announce job cuts. Yesterday, the smartphone pioneer turned software maker reported that it will be laying off more staff members. The decision is part of its plan to become profitable after a disappointing year. The company hasn’t confirmed how many workers will be laid off yet. However, according to reports, its cybersecurity business will be the most impacted. So far, news of the looming BlackBerry layoffs hasn’t boosted BB stock, which is down 3% today.
Will these job cuts help spur growth for the troubled meme stock that hasn’t caught a break in months? As of now, it doesn’t seem likely. Let’s take a closer look at BlackBerry’s plans for growth in the coming year and assess what investors should be expecting.
More BlackBerry Layoffs Are Coming
This isn’t the first time that the company has opted for job cuts in recent months. During the previous quarter, it laid off 200 workers, primarily across its cybersecurity division. Now, more BlackBerry layoffs are on the way as the company moves forward with its plans to separate its Internet of Things (IoT) and cybersecurity businesses. This plan will result in both groups operating as standalone divisions. Once completed, the measure is expected to reduce operating costs by as much as $50 million. BlackBerry has high hopes for this effort as it moves forward. As the Wall Street Journal reports:
“The company said it had identified efficiencies in its cybersecurity business particularly in cost of goods sold, and research and development. The layoffs are expected to generate annualized savings of about $27 million, with an additional $8 million in savings from other actions.”
Is There Still Hope for BlackBerry?
Given how much the once mighty company has fallen, this might be one of the only cards it has left to play. Things aren’t off to a good start this year. BB stock hit a multi-year low two weeks ago when BlackBerry offered $160 million of convertible senior notes. Since then, it has only continued falling. As InvestorPlace contributor Tyrik Torres notes, rising competition and an unfriendly economic environment have created a difficult path forward for an already unstable company. While these cost-cutting measures may sound promising to some, investors should not expect the BlackBerry layoffs to spur any real growth.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.