Trading was halted Friday afternoon pending the revised outlook.
BlackBerry aims to cut its operating costs in half by the end of the first quarter of 2015, the company said in a statement.
That will involve restructuring and a streamlined smartphone portfolio consisting of just four products – two high-end devices and two entry-level devices.
Once a leader in the smartphone market, BlackBerry expects to report sales of 3.7 million phones in the quarter. That compares with Samsung's 71.3 million phones and Apple's 31.9 million in the same quarter.
The company confirmed the poor performance of the Z10 devices released earlier this year, saying it expects a “non-cash, pre-tax charge against inventory and supply commitments in the second quarter of approximately $930 million to $960 million, which is primarily attributable to BlackBerry Z10 devices.”
The Z10 smartphones were well received by critics but have sold poorly in many of BlackBerry’s key markets, including the U.S.
The company had anticipated an operating loss in the second quarter, but the adjusted net loss is much higher than anticipated.
BlackBerry said it will re-tier the Z10 smartphone to make it available to a broader, entry-level audience and develop the next Z30 as a high-tier smartphone.
President Thorsten Heins said the announced changes were “difficult, but necessary.”
“Going forward, we plan to refocus our offering on our end-to-end solution of hardware, software and services for enterprises and the productive,professional end user. This puts us squarely on target with the customers that helped build BlackBerry into the leading brand today for enterprise security, manageability and reliability," he said.
A writedown of inventory is a move calculated to attract a buyer for the troubled company which signalled in July that it was looking for new investments.
Massive cuts to the hardware business, where BlackBerry has lost market share to Samsung and Apple, could help the firm refocus on its well-regarded messaging software.
BlackBerry shares were down more than 17 per cent at the close of trading in Toronto at $8.73.