The stock dropped 23 percent to $8.11 after reopening for trading. Shares had been halted earlier pending the news.
BlackBerry had been scheduled to release earnings next week. But the Canadian company said late Friday afternoon that it expects to post a staggering loss of $950 million to $995 million for the quarter, including a massive write down of the value of its inventory due to increasing competition. Revenue of $1.6 billion is only about half of the $3 billion that analysts expected, according to FactSet. The company's expected adjusted loss of 47 cents to 51 cents per share falls far below the loss of 16 cents per share projected by Wall Street.
BlackBerry said it wants to slash operating costs in half by the first quarter of 2015 so cutting its global headcount to 7,000 total employees is necessary.
"We are implementing the difficult, but necessary operational changes announced today to address our position in a maturing and more competitive industry, and to drive the company toward profitability," Thorsten Heins, President and CEO of BlackBerry, said in a statement.
The BlackBerry, pioneered in 1999, was the dominant smartphone for on-the-go business people and other customers before Apple debuted the iPhone in 2007. Since then, BlackBerry Ltd. has been hammered by competition from the iPhone as well as Android-based rivals like Samsung.
In January, the company unveiled new phones running a revamped operating system called BlackBerry 10. The Z10 and Q10 were designed to better compete for customers and rejuvenate the brand. But vendor marketing was uneven and BlackBerry's market share continues to lag its rivals.
BlackBerry said last month that it would consider selling itself. The Waterloo, Ontario-based company reiterated Friday that a special committee of its board of directors continues to evaluate all options. It also seemed to say that it would shift its focus back to competing mainly for the business customers most loyal to its brand.
"Going forward, we plan to refocus our offering on our end-to-end solution of hardware, software and services for enterprises and the productive, professional end user," said Heins. "This puts us squarely on target with the customers that helped build BlackBerry into the leading brand today for enterprise security, manageability and reliability."