BlackBerry Ltd. has promoted John Giamatteo to chief executive and called off plans for an initial public offering of its Internet of Things business, but still plans to split its operations.
The Waterloo, Ont-based technology company did not say why it is abandoning plans for an IPO, when it made its series of announcements Monday.
However, it used the announcements to reaffirm its commitment to dividing the company — one of the products of a strategic review of the business designed in launched in May with a goal to rewarding shareholders.
“The board, with input from its advisors, believes that a full separation of BlackBerry’s IoT and cybersecurity businesses will open up a number of strategic alternatives that can unlock shareholder value,” Dick Lynch, BlackBerry's board chair, said in a statement.
“Management is focused on moving quickly to complete this reorganization that will further enhance the focus of both businesses on their respective markets as well as their capacity for fast, flexible decision-making.”
Monday's announcements from BlackBerry mark the latest development in a period of transition for the company that rose to fame with its smartphones but has since gone all in on cybersecurity and vehicle products.
As part of its strategic review known as Project Imperium, the company planned to carve BlackBerry into two business units, dividing its cybersecurity operations from its Internet of Things offerings, which it hoped to hold an initial public offering for.
On Monday, the company said the separation will centralize corporate functions into business-unit specific teams and be done with "a view to each division operating independently and on a profitable and cash flow-positive basis going forward."
BlackBerry lost US$42 million in the second quarter of its 2024 fiscal year, compared with a loss of US$54 million in the same period last year.
To assist in the separation and "rightsizing process," BlackBerry said it is in the final stages of selecting a consulting firm to help with an "independent, ground-up assessment."
This process will be completed under Giamatteo, who was president of BlackBerry's cybersecurity business unit.
Giamatteo was previously president and chief revenue officer of antivirus giant McAfee and spent time in senior roles at software companies AVG Technologies, Solera and RealNetworks and telecommunications business Nortel Networks, his LinkedIn page said.
“I am honoured and excited to lead the next phase of BlackBerry’s evolution as its CEO," Giamatteo said in a statement.
“The Board and I am fully aligned on the next steps needed to unlock the value within BlackBerry, and work on this effort will proceed at full speed. I look forward to working with the entire team to uphold our legacy of innovation and continue providing exceptional service to our customers as we deliver on our goals.”
Giamatteo takes over from John Chen, who spent a decade at the helm of BlackBerry, where he was tasked with taking the company from its telecommunications roots to a cybersecurity software firm.
Chen retired in November, saying he was saddened to be sharing the news of his retirement "with little notice."
"However, I felt it was important that I wait for Project Imperium to run its course to avoid disrupting this critical next step for the company; a company that so many of us have poured our blood, sweat, and tears into," he wrote.
At the time, Chen said he joined the company with three priorities: to repair BlackBerry's financial health as it was "just days away from potential bankruptcy," to establish a new strategy for the company and to set it up for long-term growth.
"Now that each of these priorities has been achieved, the time seems right for me to leave," he said.
This report by The Canadian Press was first published Dec. 11, 2023.
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Tara Deschamps, The Canadian Press
