BlackBerry 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 company did not say why it is abandoning plans for an IPO
However, it reaffirmed 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.”
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.
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.
“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
Mike Daniels, Chair of the Compensation, Nomination and Governance Committee of the BlackBerry Board said:
“We are delighted to appoint John to the role of CEO for what will be a transformative period in BlackBerry’s history, as we work to fully separate our two core business units to drive enhanced shareholder value. His deep industry experience and outstanding track record of inspiring teams and delivering operational excellence means he is strongly positioned to drive this critical transformation of BlackBerry,”
