Why BlackBerry Ltd (BBRY) Is Still a Sell

2. Still shrinking

Amid continuing financial woes, BlackBerry laid off another 250 employees from a testing facility at the firm’s headquarters in Ontario, Canada. Layoffs are nothing new for BlackBerry, as the firm laid off over 5,000 employees in 2012. Still, the fresh round of cuts signals that BlackBerry’s long restructuring plan is still in the downsizing phase while investors are anxious for signs of a turnaround.

Furthermore, BlackBerry Ltd (NASDAQ:BBRY) senior executive David J. Smith abruptly resigned, leaving the firm’s PlayBook tablet floundering. Smith was in charge of the largely unsuccessful PlayBook division that wrote off $500 million in unsold PlayBook inventory for 2012. Once CEO Thorsten Heins announced that the PlayBook would not be upgraded to BlackBerry 10 (effectively terminating the device), Smith’s job was likely deemed unnecessary.

Smith is the latest in a string of executives to resign. He was preceded by the chief of U.S. sales and two additional senior managers in charge of social media. The constant turnover tells us that things aren’t improving for BlackBerry, and investors should continue with a pessimistic outlook. Whether BlackBerry is losing senior executives or low-level employees, further downsizing indicates that the firm is moving in the wrong direction.

Bottom line

BlackBerry Ltd (NASDAQ:BBRY) is finished. The company is looking for a rebound, but it simply has nowhere to turn. Apple and Samsung will continue to take BlackBerry’s last hold-out, and BlackBerry will sink further into irrelevancy. What’s more, the flood of departing employees underscores the fact that BlackBerry isn’t nearing a turnaround.

The article 2 Reasons Why This Tech Firm Is Still a Sell originally appeared on Fool.com and is written by Marie Palumbo.

This article was written by Randy Holcombe and edited by Chris Marasco. Chris Marasco is Head Editor of ADifferentAngle. Neither has a position in any stocks mentioned.The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Marie is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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