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News of massive layoffs met with cautious confidence in BlackBerry's hometown

September 20, 2013 - 3:48 PM

News of massive layoffs at BlackBerry (TSX:BB) was met Friday with cautious confidence in the company's hometown that the tech sector hub will be able to weather the job losses.

The company hasn't said how many of the 4,500 jobs that are being slashed will come at its headquarters in Waterloo, Ont. The company also has a facility in Nova Scotia that employs about 400 people, and global operations.

But whatever the number, the southwestern Ontario city's mayor and others expressed hope that the growing technology sector in the community will be able to provide a soft landing for those axed from BlackBerry.

"Waterloo has a strong and growing start-up culture and we have seen the trend of those affected being absorbed back into the community through the over 800 technology companies that exist within the region," Mayor Brenda Halloran said in a statement.

"At present, there are well over 1,000 job opportunities within our region's tech sector alone."

As the company expects to post a loss of US$950 million to $995 million when it reports its second-quarter earnings next Friday, BlackBerry says the job cuts will help it halve its operating costs by June 1, 2014.

Halloran said the community has "confidence in the strength and potential" of BlackBerry as well as the many other Waterloo-based technology companies.

There are about 1,000 other tech organizations with about 30,000 employees in the region and another 500 net new startups set for 2013 alone, said Iain Klugman, CEO of Communitech, an organization that rallies behind local tech companies.

"They're such a significant player in the community and so it's going to be a hit," Klugman said.

"(But) there's a lot of other tech companies in town and there's a real thirst for not just talent but global talent that BlackBerry was able to attract here."

The company did a "tremendous" job at attracting talent from all over the world to Waterloo, Klugman said, and with help from his organization he hopes the community can keep many of them around.

Communitech's Tech Jobs Connex will be there to "redeploy" as many people affected by Friday's announcement as they can, Klugman said.

Between August 2012 and August this year nearly 1,000 ex-BlackBerry employees went to Tech Jobs Connex to access their services and more than 700 found jobs or started their own companies, Klugman said.

"We've seen a pretty high rate of absorption right across everything from startups through to other large companies in the community," he said.

OpenText, Christie, COM DEV, Descartes, Intel and Google are among the large companies in Waterloo, Klugman said.

"We have seen a number of global companies that have chosen Waterloo Region over the last couple of years, for strategic reasons, largely relating to the extraordinary talent we have here," he said.

The University of Waterloo boasts that it is the largest academic computer science research centre in Canada, with more than 75 faculty and 2,000 students.

"We're an engine room for growth in Waterloo Region and in Ontario generally," said university spokesman Nick Manning.

He pointed to an announcement this week from Twitter co-founder Jack Dorsey, who said his new mobile payment company Square will open an office in Waterloo next year.

"We are amongst the world's leaders on research in computer science and I think nothing about today's news changes that," Manning said.

"We will continue to produce world-leading research in computer science."

The school would not divulge how many co-op placements it has at BlackBerry, but Manning said it has relationships with thousands of companies.

"We experience ups and downs of various companies," he said. "So we're reasonably confident that we'll be able to weather the changes that BlackBerry are experiencing like we would with any other organization on the co-op front."

A company official later confirmed that more than 400 currently work at the facility in Bedford, though she declined to give a specific number.

News from © The Canadian Press, 2013
The Canadian Press

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