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BlackBerry squashes plan to spin out its IoT biz

BlackBerry has decided its plan to split into two separate companies is not a good idea and will instead reorganize itself into two independent divisions.

The former smartphone champ has two businesses: cyber security and IoT. Neither has thrived in recent years so, in pursuit of greater shareholder value, the Canadian biz conducted a review it called Project Imperium. It hoped to find a new and profitable path after years of unsuccessful efforts to have its enterprise messaging and security offerings find favor among automakers and other audiences.

As of October, the determination of the review was that “separating the IoT and cyber security business units into two independently operated entities is the optimal strategic direction for BlackBerry.”

But in a Tuesday announcement the erstwhile market leader revealed it conducted a “reassessment of the previously announced outcome of Project Imperium” and the board has now “decided to pursue a separation of the IoT and cyber security businesses and establish them as standalone divisions.”

What this means is “the company will no longer pursue a subsidiary initial public offering of its IoT business unit.” It will instead separate and streamline BlackBerry’s centralized corporate functions into teams dedicated to each business unit, “with a view to each division operating independently and on a profitable and cashflow-positive basis going forward.”

News of the plan to bifurcate instead of break up came as the biz also named John J. Giamatteo as its new CEO.

Long-time CEO John Chen announced his retirement in October and left the building in November.

Giamatteo has bossed BlackBerry’s cyber security biz since 2021, having previously held senior leadership positions at security outfits McAfee and AVG Technologies.

In his canned quotes, Giamatteo declared himself “honored and excited to lead the next phase of BlackBerry’s evolution as its CEO.”

The freshly minted boss went on to opine that BlackBerry’s IoT and cyber security businesses “have market-leading technology, exceptional teams and large market opportunities.”

“The board and I are fully aligned on the next steps needed to unlock the value within BlackBerry, and work on this effort will proceed at full speed,” he added.

One of those steps will be cost-cutting. The announcement ends with an ominous statement: “To assist in the separation and right-sizing process, BlackBerry is in the final stages of selecting a consulting firm to bring expertise and additional resources for an independent, ground-up assessment.” ®