December 10, 2013 Sections
Winnipeg Free Press - PRINT EDITION
HALIFAX -- Embattled tech giant BlackBerry announced the closure Thursday of its offices in the Halifax area, eliminating more than 300 high-paying jobs as part of a global push to cut costs.
The smartphone maker (TSX:BB) issued a statement saying the location in suburban Bedford would be shut down as of Jan. 10, affecting more than 350 employees. Most of them work as technical-support representatives.
But the Nova Scotia operation was supposed to be much more than just a support centre. In February, the company announced the location would be the home for a new centre of excellence to promote the BlackBerry 10 smartphone.
However, the company is now in the process of cutting its global workforce by 4,500 as it struggles to deal with a shrinking market share and disappointing sales of that device.
BlackBerry, based in Waterloo, Ont., said about 35 workers in Halifax will be offered continued employment, but they will have to work from home.
"We know that our employees in the Halifax area have worked hard on behalf of our company," the company said in a statement.
"This is difficult news for them and for the Halifax community. However, these changes are necessary... to drive the company toward profitability."
The company announced in November 2005 it would set up shop in Nova Scotia, thanks in part to financial assistance offered by the provincial 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.
The Bedford operation has been in operation since 2006.
BlackBerry drew almost $11 million from the payroll-rebate program over a six-year period ending in February 2012, according to Nova Scotia Business Inc., the province's business lending agency.
In February, when the centre of excellence was announced, the province said 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.
More recently, the NDP government has refused to release figures on the number of jobs created.
The company said Thursday it would repay $2 million in government contributions.
The layoffs in Halifax come at an awkward time for the province, which witnessed the defeat of its NDP government in a provincial election Tuesday. The province's stagnant economy and lack of job growth figured prominently in the 31-day campaign.
Nova Scotia's Liberal party was elected to govern with a large majority, but premier-designate Stephen McNeil has yet to assume power because the transition to a new government has just started.
A spokeswoman for NDP Premier Darrell Dexter, who lost his seat in the Liberal sweep, wouldn't comment on the closure. She referred all calls to McNeil and his team.
Kelly Regan, the re-elected Liberal who represents the Halifax-area riding where BlackBerry is located, said the New Democrats must have known the local operation was in jeopardy.
"I am sure that the province will have some kind of a program ready," she said. "They had to have known this was coming. All you had to do was listen to the news."
Regan said the shutdown will have a big effect on Halifax because virtually all of the jobs are relatively high-paying positions.
"I feel terrible for these families who are losing a major source of employment today," she said.
McNeil later issued a statement saying he understands the NDP government will contact BlackBerry to identify services it can offer jobless workers.
"It is my sincere hope that assistance will help provide a smooth transition to new employment opportunities in the Nova Scotia economy," he said.
BlackBerry workers leaving the company's Bedford offices Thursday declined comment.
-- The Canadian Press
Republished from the Winnipeg Free Press print edition October 11, 2013 B16