Executives at Jabil Circuit this week said they likely would cut ties with one of the company’s largest customers, BlackBerry, after the troubled smartphone maker posted second quarter losses of nearly $1 billion.
BlackBerry, Jabil’s second-largest customer behind Apple, announced last week it would lay off 4,500 employees, or 40 percent of its global workforce.
During the 2013 fiscal year, BlackBerry accounted for 12 percent of Jabil’s business; Apple made up 19 percent of Jabil’s business.
“We are faced with the strong possibility of disengaging with Blackberry,” Jabil CEO Mark Mondello said in a call with investors.
While Mondello said management has only just started to consider how it will restructure its BlackBerry operations, he estimated the loss would result in $35 million to $85 million in charges for Jabil in the next year as the company decides how to “redeploy and/or get rid of” infrastructure and employees.
The company projects a $500-million loss in revenue in its high-velocity sector due to BlackBerry’s losses.
Jabil posted net revenue for 2013 of $18.3 billion, up 7 percent over the previous year’s earnings of $17.1 billion. The company’s stock dropped 10 percent Thursday and was down 0.2 percent Friday.