Actually not quite DaFly. As also explained on
wikipedia...
A turbine engine failure refers to an incident wherein a turbine engine in an aircraft unexpectedly stops producing power because of a part malfunction, in the absence of circumstances such as fuel exhaustion.
As you can see mentioned there, its a failure if the engine stopped producing power, not just stopped. I would guess with several blades missing the engine would stop producing power.
Under the heading 'Things that are not failures' they also mention...
A compressor surge is a disruption of the airflow through a gas turbine engine that can be caused by engine deterioration, a crosswind over the engine’s inlet, ingestion of foreign material, or an internal component failure (a thing that is of course a failure, or, not not a failure) such as a broken blade.
Of all the examples mentioned they state that only the blade failure is considered an engine failure and not just an engine shut down.