But what does it really mean? Is BlackBerry gasping for air and simply trying to stay afloat? Or is there something more going on?
The trouble is, unless you're on the board of directors you don't know any more than what The Wall Street Journal reported about it. It begs the question, what do we actually know?
We know that downsizing is a tool businesses use to cut costs, streamline operations, and avoid collapse. But which are they focused on and what's the truth about downsizing?
Wayne Cascio, a management professor at the University of Colorado in Denver, explains 13 of the most common myths and facts about corporate downsizing conditions. For those of you freaking out about BlackBerry's decision to downsize and what that might mean for new BlackBerry devices...read on...
Mr. Cascio hits on a lot of key points in his research on downsizing. When a company downsizes, they don't always reap rewards. Sometimes the loss of continuity and experience isn't worth the money saved from having a smaller workforce. But there are things that BlackBerry's experience lends them towards in this new round of layoffs.
MYTH: Companies that are laying off workers are not hiring new ones.
FACT: Companies are tailoring their complements of skills.
John Chen said this himself. He's looking for the right people, in the right places, with the right knowledge to make BlackBerry innovative and a stable company again. The focus is software but he's also committed to maintaining contracts with large organizations who use their hardware like the US Army.
MYTH: Downsizing employees boosts profits.
FACT: Profitability does not necessarily follow downsizing.
If this is true then what is BlackBerry doing? Probably not trying to save money. So what does that mean? It means their focus is different. It means they're paying attention to streamlining. It means they are redefining what it means to properly utilize their resources and keeping BlackBerry relevant and successful.
MYTH: Downsizing employees is a one-time event for most companies.
FACT: The best predictor of whether a company will downsize in a given year is whether it has downsized the previous year.
John Chen said no more layoffs...last year. He was right. But it's 2015 now in case you missed it. John has proven he'll make the tough decisions when he has to. Well, apparently he had to. So he did.
Extreme downsizing rarely benefits a company in the long run either. But there's good news. This likely won't be extreme.
Hey everyone!? Relax.