BlackBerry Ltd. has announced a goal of enhancing its annual net profit by $100 million. This improvement is expected to come about through cost reductions and margin expansion efforts. In addition to the previous report of $50 million in annual cost-saving measures, the secure software company declared more job cuts in its cyber security department.
In terms of cash flow, BlackBerry is optimistic. The firm foresees enhancements in operating cash flow usage in the current quarter and projects to become cash flow positive by the fourth quarter of fiscal year 2025. It maintains its total company revenue prediction at around $150 million to $159 million, and anticipates steady Cybersecurity Annual Recurring Revenue (ARR) in the current quarter.
During the previous quarter, BlackBerry initiated measures expected to curtail the annual cost run rate by roughly $50 million. The cuts were primarily concentrated in the Cybersecurity division and resulted in the lay-off of approximately 200 employees.
This quarter, BlackBerry moves forward with actions to further restructure its costs. Within the Cybersecurity department, additional job cuts will potentially save the company $27 million annually, while other non-staff related actions should contribute an additional $8 million in annual savings.
As a part of the cost-saving strategy, BlackBerry is exiting six out of 36 global offices, including a base in San Ramon, California. This move is projected to save around $7 million annually. Other staff reductions are expected to yield an estimated $13 million in annual savings.
On the structural front, BlackBerry is making significant strides by establishing its IoT and Cybersecurity units as fully independent divisions. The company has set up a Project Management Office, and appointed top-tier management consultants, Alvarez & Marsal, to assist with the reorganization.
According to BlackBerry, Chief Financial Officers, Chief People Officers, and General Counsel for the IoT and Cybersecurity divisions are in place and assembling their respective back-office teams. This move complements the already existing independent Sales, Marketing, and Research & Development departments in each business division.
