On heels of poor quarter, BlackBerry’s Chen demotes head of sales

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On the heels of poorer-than-expected third quarter results, BlackBerry Ltd. chief John Chen has demoted the company's head of sales, part of a broader set of management changes at the beleaguered smartphone maker.

BlackBerry confirmed in an e-mail Wednesday that Eric Johnson, formerly president of global sales for BlackBerry, has been replaced by the company's president of enterprise, John Sims. Mr. Johnson, hired 11 months ago, "will focus on driving enterprise sales, deepening our relationships with enterprise customers and ensuring" the company's server software and portfolio of services "are meeting expectations" in a new role, a company spokesman said in an e-mail.

The move is a blow for Mr. Chen, who overhauled the management at BlackBerry after joining 13 months ago, bringing in many former colleagues from his time running California database software firm Sybase and working as a senior executive at successor SAP. Mr. Johnson spent 10 years at Sybase and SAP, working most recently as senior vice-president of SAP's global database and technology group. Like many senior executives who have joined under Mr. Chen, his background is more concentrated on software and services – Mr. Chen's focus going forward – rather than selling smartphones.

Mr. Chen last week expressed frustration that analysts were expecting a quicker turnaround than he himself had promised when he said he needed two years to get BlackBerry back on track. But he also admitted earlier this month the company has had difficulty getting much support from carriers, which were a key part of the company's success before it ceded its lead as the world's leading smartphone platform four years ago. The company is attempting to rebuild its sales force by focusing on direct sales to customers, and recently hired Howard Stevens, another former senior SAP exec in its telecom group, to head sales efforts to wireless carriers.

BlackBerry also confirmed new roles for two other executives: enterprise engineering team leader Billy Ho, who has now added enterprise product management to his duties, while Herman Li, previously the senior vice-president for software with Blackberry Messenger, the company's instant messaging service, will now lead BBM engineering and product management. The management changes, which were only announced internally to company employees this month, will take effect by the end of the month.

BlackBerry last week reported less than $800-million (U.S.) in revenue in the third quarter, more than $100-million lower than most analyst estimates. Mr. Chen warned revenue, which has continued to fall lower than market expectations, will likely drop for at least one more quarter before his multiple efforts to recharge the company with new services and software offerings kick in and start reversing its fortunes. The company is also hoping for a strong showing by its newly launched Passport and Classic smartphones.