(Image credit: Getty Images via @daylife)  Hitting the restart button is harder than it looks.  BlackBerry, in the middle of trying to save its failing business, unexpectedly announced on Friday it expected to report a nearly $1 billion loss for the quarter ended June 30. It’s a result of a massive write-down of Blackberry’s inventory of its new touch-screen phone, a stark sign that the company has been unable to become competitive again in the smartphone market–a market it pioneered, one that made its founders into billionaires.  In another sign of BlackBerry’s precarious situation, the company says it’ll slash its workforce by 40%, or 4,500 jobs, effectively gutting itself and part of an effort to halve costs by 2015.  BlackBerry seems to have little choice now: it must find a buyer or face the reality of turning off the lights. BlackBerry is running low on cash–it took half a billion dollars to stay operating last quarter–and it has already enlisted the help of bankers. Founder Mike Lazaridis, has spoken with private-equity firms about a joint-bid. Lazaridis still controls 6% of it.  Lazaridis and long-time partner Jim Balsillie both departed after Thorsten Heins became CEO in 2011. Heins worked to restore confidence, to make BlackBerry competitive again with the rivals surging beyond it in the smartphone market: Apple, Samsung and Google. Heins oversaw the creation of a new operating systems and pinned his hopes on two new handsets he hoped could rival the iPhone and Android smartphones.  In response to the awful quarterly numbers, BlackBerry on Friday afternoon shares were halted, then fell by 20% after the stock resumed trading. BlackBerry on Friday finished down 17.9% at $8.73.  It is almost an inconceivable place that BlackBerry finds itself in. The company’s roots stretch back nearly three decades, to a familiar story of entrepreneurial verve. In 1984, Lazaridis founded the company from a small office in a Waterloo, Ontario strip mall. His startup capital: a $15,000 loan from his parents.  Lazaridis, an engineer by training, began experimenting with sending text electronically. He added Jim Balsillie to the firm eight years later, and the two shared the chief executive job for the next two decades. Beginning with wireless pagers, they built the company into a dominant force–at one point controlling more than half the U.S. smartphone market. (By contrast, today its market share is less than 3%.) The stock hit its all-time high in 2007, at more than $227 a share. By FORBES’ measure, Lazaridis and Balsillie saw their personal fortunes peak in early 2008, when Lazaridis had accumulated a $3.6 billion fortune, Balsillie a $3.4 billion fortune.  The most stalwart fans were business people who like Blackberry’s physical keyboard, easy-to-use operating system and its messaging service, BBM. In the ultimate sign of its popularity, President Obama made keeping his BlackBerry a priority when he took office.  Around the same time that Obama became commander in chief, Apple quickly assumed its role as the commanding force within the smartphone market, making BlackBerry’s phones seem old and less innovative. Google followed with its Android software, opening a new avenue for cheaper devices.  By January 2012, Balsillie and Lazaridis were out, and Heins came in. His plans included laying off a third of the company’s staff. He pushed the remaining engineers to build an operating system to capture people’s attention–and their wallets–as Apple had.  When it finally debuted, months delayed, it was widely panned.  Reach Abram Brown at abrown@forbes.com.
BlackBerry expects to book an operating loss of $950 million to $995 million, nearly three times the size that analysts predicted.