BlackBerry to close Halifax office: 'These changes are necessary'

HALIFAX – Tech giant BlackBerry (TSX:BB) has announced the closure of its offices in the Halifax area, eliminating more than 350 jobs.

The company based in Waterloo, Ont., issued a brief statement Thursday saying its offices would be shut down as of Jan. 10. Most of these employees work as technical support representatives.

BlackBerry said about 35 employees in Halifax will be offered jobs, but they will have to work from their homes.

The company previously announced plans to cut its global workforce as it struggled to deal with a shrinking market share and disappointing sales of its BlackBerry 10.

The location in the Halifax suburb of Bedford opened in September 2008.

“We know that our employees in the Halifax area have worked hard on behalf of our company and we are grateful for their commitment and contributions,” the company said in a statement.

“This is difficult news for them and for the Halifax community. However, these changes are necessary in order to refocus our business to drive the company towards profitability and success in a maturing and more competitive mobile industry.”

A spokesperson declined further comment when contacted by phone.

The company was lured to Nova Scotia in 2005 by a previous Progressive Conservative government.

The province offered $19 million in subsidies, including $14 million in payroll rebates and $5 million for training and recruitment. The company was told it had to create 1,200 jobs over five years to get the full rebate.

BlackBerry drew almost $11 million from the payroll rebate program over a six-year period ending in February 2012, Nova Scotia Business Inc. has said.

In February, the provincial government announced the company could get up to $10 million over five years if it kept at least 400 jobs in Nova Scotia at an average salary of at least $60,000 a year. The money was supposed to help create a so-called centre of excellence to promote the BlackBerry 10.

The company said Thursday it would repay a $2-million contribution from the Nova Scotia government

Premier Darrell Dexter has said without government financial help, the company could have moved the work elsewhere, draining jobs from the province. In return for the infusion of public cash, the company also committed to spend $4 million annually on the centre of excellence, which was to support the new platform by offering training and research.

The provincial government has refused to release figures on the number of jobs created by BlackBerry.

The company had already announced 300 people were being laid off at its head office this week as part of its broader cost-cutting plan. The firm began handing out the notices on Monday, though the cuts have been ongoing across its global operations for several weeks.

BlackBerry plans to eliminate 4,500 jobs over the coming months. Once the job cuts are complete, BlackBerry will have cut more than 7,000 employees since 2011, a steep decline from a total staff that once neared 20,000.

In September, BlackBerry received a conditional takeover offer from Fairfax Financial (TSX:FFH), BlackBerry’s largest shareholder, worth $9 per share. The offer values the company at $4.7 billion.

Other interested buyers are also circling the company, according to reports from various media outlets. The tech names run the gamut from Google, Cisco and SAP, to Microsoft and Cisco.

Last week, BlackBerry said it expects to face costs of at least US$400 million before the end of May 2014. The expenses are tied to the severance payments for the layoffs, as well as reworking its smartphone lineup and other changes to its manufacturing, sales and marketing operations.

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