A Snowier Silicon Valley in BlackBerry’s Backyard

A Snowier Silicon Valley in BlackBerry’s Backyard

On Friday, BlackBerry released another grim earnings report, posting $4.4 billion in losses and a 56 percent drop in revenue for its fiscal third quarter. The report was the latest in a string of cringe-worthy quarters from the company, results that have forced BlackBerry to begin laying off 4,500 people, or 40 percent of its work force.

But unlike some cities that suffered when a big local business faltered, as Rochester did with Kodak and Xerox, BlackBerry’s backyard of Waterloo still bubbles with economic energy.

Technology companies large and small are coming here, about 70 miles southwest of Toronto, to recruit BlackBerry’s talent — and several of the companies are also setting up shop in town.

Google, a local presence for nearly a decade, was recently joined by its Motorola Mobility hardware subsidiary. Square, the mobile credit-card-processing service started by Jack Dorsey, Twitter’s co-founder and chairman, opened an office. Cisco announced this month that it would create 1,700 research and development jobs within commuting distance.

And several start-ups that left Waterloo for the financing and talent of Silicon Valley, including Thalmic Labs, a gesture-control computing company, have come home.

Because of these companies and the appetite for tech workers from the region’s long-established insurance industry, several analysts suggest that most, if not all, former BlackBerry workers in Waterloo will find work without having to pack up their homes.

“The area has a really strong density of tech talent,” said Bryan Power, the talent director for Square, which plans to have about 40 employees working in the region by the end of 2014. “We have a long timeline for here. We really want to be part of this community.”

BlackBerry, which was originally known as Research in Motion, was not the first technology company in this city. But the company’s rise to global prominence turned Waterloo and its larger twin city, Kitchener, from being Canada’s rubber goods, hot dog and furniture capital into the country’s high-tech center.

BlackBerry’s rise, and the relatively high salaries of its employees, drew unusual trappings for a Canadian urban area the size of Kitchener-Waterloo, which has about 320,000 people. Jaguar and BMW dealerships have thrived, for example, as has an Apple store.

But BlackBerry’s fall has been nearly as steep as its climb. Its earnings report on Friday underscored the problems facing the company, which only a few years ago was a smartphone leader. Still, no big downturn is evident in the area.

The company does not generally break down layoffs by region, but Karen Gallant, who runs a program to find local work for jobless tech employees, estimates that from the current layoffs and an earlier round begun in 2012, about 3,500 BlackBerry workers have lost their jobs in the two cities. The regional unemployment rate last month was 6 percent, down half a percentage point from a year ago.

Even before the latest round of layoffs at BlackBerry was announced in September, several top technology companies, including Apple and Facebook, held recruiting nights in the area. Some companies that have swooped in for workers have tried to woo people to distant head offices.

But Mr. Power said Square decided that an office in the area would improve the company’s chances of hiring the best talent from the University of Waterloo, which has highly regarded computer science and engineering faculties and is a major part of the attraction for tech companies. Jesse Wilson, an Android programmer at Square, persuaded the company on the merits of Waterloo when he was hired.

Mr. Wilson, like Mike Lazaridis, the co-founder and former co-chief executive of RIM, studied at the University of Waterloo. Research in Motion grew out of a student project there, as did several other local companies. BlackBerry, whose engineering center sits across a railway line from the campus, was once the main local attraction for graduates. But that quickly shifted as its fortunes waned.

The region has also tried to avoid a repeat of what happened in Ottawa, about 350 miles to the northeast, which experienced an exodus of skilled tech workers after the collapse of Nortel. A tech industry group in the area, Communitech, provides office space, mentoring and other services to start-ups and even large established firms. The group’s founders include Jim Balsillie, the former co-chief executive and chairman of BlackBerry.

View the whole story here