Adobe to Realign, Cut 750 Jobs

POSTED November 9, 2011

SAN JOSE -- Adobe Systems provided a business update for its fourth quarter fiscal year 2011, ending Dec. 2, 2011. The company projects record revenue but says it will cut 750 jobs. The company also announced plans to further align its business around the explosive growth categories of Digital Media and Digital Marketing solutions.

Adobe is investing aggressively in Digital Media and Digital Marketing, two growing market areas. In Digital Media, the company is the industry leader in content authoring solutions, enabling customers to create, distribute and monetize digital content. In Digital Marketing, the company intends to be the leader in solutions to manage, measure and optimize digital marketing and advertising.

In order to better align resources around Digital Media and Digital Marketing, Adobe is restructuring its business. This will result in the elimination of approximately 750 full-time positions primarily in North America and Europe. We expect to record in the aggregate approximately $87 million to $94 million in pre-tax restructuring charges. Included in these charges are (i) approximately $17 million to $19 million primarily related to the consolidation of leased facilities and (ii) approximately $70 million to $75 million related to employee severance arrangements. We expect to record approximately $73 million to $78 million of these charges in the fiscal quarter ending Dec. 2, 2011.

With approximately four weeks remaining in the quarter, the company believes it will achieve fourth quarter revenue within the $1.075 billion to $1.125 billion range it previously provided on Sept. 20, 2011.

"We expect to report record revenue within the fourth quarter target range we previously issued," said Mark Garrett, executive vice president and CFO of Adobe.

Adobe plans a strategy to target mobile and digital media opportunities. Important elements include:

Continuing to deliver innovation on PCs through its Creative Suite software while extending its customer reach through tablet-based touch apps and Cloud-based software delivery
Shifting resources to support even greater investment in HTML5, through tools like Adobe Dreamweaver, Adobe Edge and PhoneGap, recently added through the acquisition of Nitobi
Focusing Flash resources on delivering the most advanced PC web experiences, including gaming and premium video, as well as mobile apps
Enhancing digital publishing solutions to empower media companies to profit through publishing their content to any screen
Investing in media monetization, including the large growth opportunity in video advertising, facilitated by the acquisition of Auditude announced last week
Extending its leadership in document services with its Acrobat product line and increasing its focus on the growing category of electronic contracts and signatures through the recent acquisition of EchoSign

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