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UPDATE 3-BlackBerry replaces CFO, others exit, in executive shakeup

Euan Rocha
Monday, 25 Nov 2013 | 5:00 PM ET

TORONTO, Nov 25 (Reuters) - BlackBerry Ltd said on Monday that three top executives, including its chief financial officer, are stepping down as recently appointed Chief Executive John Chen embarks on his promised shakeup at the struggling smartphone maker.

Chen, brought in as interim CEO earlier this month after the company dropped a plan to sell itself, said BlackBerry is setting its marketing sights on corporations, governments and the big clients that were at the root of its early success.

BlackBerry named James Yersh to replace Brian Bidulka as CFO. Yersh has worked with BlackBerry since 2008, serving as its senior vice president, controller and head of compliance. Bidulka will stay on through March 1 as special adviser to Chen.

Chief Operating Officer Kristian Tear and Chief Marketing Officer Frank Boulben are also leaving. Tear played a key role in BlackBerry's latest restructuring, while Boulben was instrumental in the company changing its branding and name to BlackBerry from Research In Motion.

Reinforcing the focus on high-profit business customers that BlackBerry outlined in September, Chen said he aims to make the company a top provider for companies and governments of mobile devices and device-management tools.

"New interim CEO Chen is not behaving like an interim CEO, in our view, and is dramatically altering the company," Jefferies analyst Peter Misek wrote in a research note, expressing surprise at how hands-on Chen has been.

BlackBerry named Chen, a turnaround artist with software maker Sybase in the late 1990s, as its interim CEO earlier this month as it unexpectedly shelved efforts to sell itself. It opted instead to raise $1 billion in a convertible notes offering led by Fairfax Financial Holdings Ltd, its largest shareholder.

BlackBerry did not name replacements for the other two executives exiting the company, but signaled more changes could be coming. It said Roger Martin, a board member since 2007, has also resigned.

TOUGH COMPETITION

BlackBerry, once a market leader in on-the-go email, has suffered a drastic loss of market share to Apple Inc's iPhone and devices that are powered by Google Inc's Android software. Its new line of devices has so far failed to win back customers.

Chen told Reuters earlier this month that he would change management, both hiring from outside the company and promoting from within.

BlackBerry has laid off thousands of workers over the last two years and reported a loss of nearly $1 billion in the quarter to Aug. 31. In September it said it would shed more than a third of its global workforce to lower expenses, rekindling fears of the company's demise and sending its shares into a tailspin.

Revenues slumped 45 percent from a year earlier to $1.6 billion.

BlackBerry shares, which peaked at around $148 in 2008, touched a 10-year year low of $5.98 on the Nasdaq last week. The Nasdaq shares closed up little changed at $6.25 on Monday, while its Toronto-listed stock was up 1.4 percent at C$6.60.

"John Chen is putting his team and strategy in place, which, unsurprisingly, is largely enterprise-focused," said Wells Fargo analyst Maynard Um.

BlackBerry's next quarterly results are due on Dec. 20, and analysts expect the company to report another large loss, given the uncertainty caused by its recent sale process.

"We are increasingly concerned that recent headlines have created customer angst," Um said. "Though we are believers that the company can exist as a smaller entity, it may require further declines in its installed base as well as further restructuring."

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