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Adobe lays off 600 full-timers; skips Macworld Expo
Thursday, December 04, 2008 - 01:03 PM EDT

Adobe Systems has provided preliminary financial results for its fourth quarter ended Nov. 28, 2008.

Based on preliminary Q4 financial information, Adobe believes it will achieve fourth quarter fiscal 2008 revenue in the range of $912 million to $915 million. The Company also believes it will achieve GAAP diluted earnings per share in the range of $0.45 to $0.46, and non-GAAP diluted earnings per share in the range of $0.59 to $0.60. The GAAP and non-GAAP diluted earnings per share estimates include two favorable tax items: a current quarter catch-up related to the reinstatement of the U.S. research and development credit and a favorable tax court settlement, which increased Q4 estimated GAAP and non-GAAP diluted earnings per share ranges by approximately $0.05.

Adobe’s fourth quarter revenue target range was $925 million to $955 million, and its fourth quarter diluted earnings per share target ranges were $0.39 to $0.41 on a GAAP basis, and $0.51 to $0.53 on a non-GAAP basis. A reconciliation of preliminary GAAP and non-GAAP financial results is available later in this press release.

“The global economic crisis significantly impacted our revenue during the fourth quarter,” said Shantanu Narayen, president and chief executive officer, in the press release. “We have taken action to reduce our operating costs and fine-tune the focus of our resources on key strategic priorities.”

The Company cited weaker-than-expected demand for its new Creative Suite 4 family of products that began shipping in Q4 in North America and Europe as the main cause for the shortfall in fourth quarter revenue.

Adobe also announced the implementation of a restructuring program, and has taken steps to reduce its headcount by approximately 600 full-time positions globally. The restructuring will result in anticipated pre-tax charges totaling approximately $44 million to $50 million. The Company expects approximately $28 million to $30 million of the restructuring charges to be recorded in the fourth quarter of fiscal year 2008.

Adobe also provided initial financial targets for its first quarter of fiscal year 2009. The Company stated it is targeting Q1 revenue of $800 million to $850 million. In addition, the Company said it is targeting a Q1 GAAP operating margin range of 26 percent to 28 percent, and a Q1 non-GAAP operating margin range of 37 percent to 38 percent. A reconciliation of GAAP and non-GAAP financial targets is available later in this press release.

The Company will discuss its quarterly and full-year results as well as its Q1 financial targets and the restructuring program on its Q4 and fiscal year 2008 earnings conference call that is scheduled for Dec. 16, 2008.

MacDailyNews Note: The layoffs come shortly after Adobe announced that the company will not be participating in the annual Macworld Conference and Expo show in San Francisco which takes place January 5-9, 2009.

MacDailyNews Take: For years Adobe thought the Mac was dead. They even started banking on it. But, they were wrong. Dead wrong.


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Dec 04, 08 - 02:09 pm Comment from: Gregario

Photoshop at $500, when you can just use Pixelmator for OSX for pocket change.

Dec 04, 08 - 02:10 pm Comment from: cptnkirk

Adobe has treated the Mac as a second class citizen for years even though they would not even exist if Apple had not created the desktop publishing industry in the 80s.

Considering the growth in Mac sales and the number of people working on Macs, you think they would want to get back into a marketplace that has for years bought more software than the other platform.

Time to 'think different' at Adobe!

Dec 04, 08 - 02:12 pm Comment from: sfstevelong

Check out this link!

http://www.dearadobe.com/top_rated.php

Dec 04, 08 - 02:16 pm Comment from: Logan

Adobe sucks. Period. They grossly overcharge and give you bloated, slow programs for it. Sounds like Microsoft doesn't it?

Dec 04, 08 - 02:26 pm Comment from: Rob

Too expensive, too bulky, too bad.

There was a time when I was a huge fan of Adobe, now they're just like M$.

Dec 04, 08 - 02:34 pm Comment from: kevt

Maybe it's time for a buy out.

Dec 04, 08 - 02:34 pm Comment from: Xx

They will be at MacWorld, but only giving seminars. Get the fukkking journalism right.

Dec 04, 08 - 02:43 pm Comment from: msr

I hate Adobe so much. I hope they go under.. what an awful company.

Dec 04, 08 - 02:46 pm Comment from: Alex Wu

Job cuts are really out of control, and it's sad to know it's now affecting one of our favorite companies. The critical step now is to identify companies out there who are providing opportunities in these tough times. Here's a pretty good site that specially unites these employers to save main street - http://www.jobstaxi.com/savemainstreet

God bless Adobe.

Dec 04, 08 - 02:54 pm Comment from: Chuck U Farley

More Expo space for companies that want to put out quality products and quality service. Adobe lost both years ago.

Dec 04, 08 - 02:55 pm Comment from: krquet

To me, when people speak highly of Adobe, I feel maybe they are referring to the Aldus bits.

Dec 04, 08 - 02:59 pm Comment from: HMCIV

@ kevt

Maybe you're looking for more of a "Bye... Out!"?

If Adobe was the most evil software company on the face of the planet, we'd be in pretty good shape. wink

Dec 04, 08 - 03:07 pm Comment from: Tony

Adobe is seeing weak demand for CS4 because there's nothing in it that is enticing enough to spend thousands of dollars on. Software this expensive shouldn't be updated every 12-18 months with only subtle changes. They better make some revolutionary upgrades with each version or go with 24-30 month cycles instead.

Dec 04, 08 - 03:08 pm Comment from: jonricmd

I am sad for the employees that are going to be laid off, but on the other hand I feel that Adobe has been arrogant and indifferent with regard to Macintosh version of Photoshop. It still seems inconceivable that they are so far behind in modernizing their software. If someone would come up with a "Photoshop Killer" for the Mac (all the current image manipulation programs are limited in one way or another IMHO), they would absolutely lose the whole Mac market!

Dec 04, 08 - 03:12 pm Comment from: JohnLee

There are now many other programs that can create, edit, and read PDF files, and there are, of course, other graphics programs. Maybe we're at a point where we don't need Adobe.

Dec 04, 08 - 03:20 pm Comment from: Darkness

I just hope that our old friend "ChrissyOne" survives the current purge. I know she said she wouldn't be posting here anymore, but I hope she still at least checks in from time to time. Just wanted you to know you do have fans and that we wish you the best.

Dec 04, 08 - 03:21 pm Comment from: MacMental

Maybe they should reduce the price of their over-priced software.

Dec 04, 08 - 03:29 pm Comment from: ron

Adobe is mud. I had an adobe building. It rained. I have a puddle of muddle. Adobe is a muddle of bloat.

Dec 04, 08 - 03:31 pm Comment from: Jubei

Bring back MacPaint. I have my overcoicked Mac 512K ready to make that software fly!

Dec 04, 08 - 03:43 pm Comment from: Desinformado

Doomsday for Adobe
Adobe is feeling the heat, this time is totally alone, fighting Microsoft's ambitions to dominate the world and fighting Apple...

Dec 04, 08 - 03:54 pm Comment from: Passerby

Those numbers look pretty good, but they're still laying off 600?

What do those 600 do?

Demand for CS4 lower than expected by whom? The pre-release reviews were pretty united in saying it was a less than compelling upgrade that didn't offer anything worth the upgrade price. And they don't seem to have done much under the hood to update the code. I hope those 600 aren't programmers.

Dec 04, 08 - 03:58 pm Comment from: alansky

Photoshop at $500, when you can just use Pixelmator for OSX for pocket change. —Gregario

I agree that Adobe apps have gotten too expensive, but Pixelmator is definitely no substitute for Photoshop. Photoshop Elements, on the other hand, is a very capable program in its own right for a fraction of the cost.

It's not that Adobe isn't making good products, because they are. Photoshop is and always has been the undisputed king of image editors. But times are tough; and meanwhile, even Adobe's own Lightroom (which is advertised right next to the message window I am typing in at this very moment) is taking sales away from their flagship product.

Dec 04, 08 - 03:59 pm Comment from: 84 Mac Guy

This is what happens when you bet on the wrong horse. Now when is MS going to announce some layoffs.

Dec 04, 08 - 03:59 pm Comment from: lunchtimereader

Adobe products are waaaay overpriced. Year after year, they add more bells and whistles to their CS and it's gotten to the point where even companies hesitate to upgrade. It's out of control.

Dec 04, 08 - 03:59 pm Comment from: doc

God I hate Adobe software. Most of the problems, I have had on any of my macs are because of Adobe software bloat or other Adobe problems.

Dec 04, 08 - 04:02 pm Comment from: lunchtimereader

...and, their CS is getting so bloated, it's like a Microsoft product.

Dec 04, 08 - 04:17 pm Comment from: alansky

Adobe has treated the Mac as a second class citizen for years even though they would not even exist if Apple had not created the desktop publishing industry in the 80s. —cptnkirk

The desktop publishing industry was not Apple's invention and would not exist without Adobe Postscript and the Adobe Type Library. The Apple LaserWriter was also a crucial element, as was Aldus PageMaker (later bought by Adobe).

I worked at Adobe in the "good old days" (1988-1996) when Steve Jobs used to give talks in the Adobe cafeteria and it was impossible to imagine that the two companies would not always be the best of friends. It does appear that Adobe has to some extent turned its back on Apple in the intervening years, which is unfortunate for everyone in the industry and may yet turn out to be especially infortunate for Adobe.

Dec 04, 08 - 04:24 pm Comment from: SirROM

ChrissyOne

Haven't seen you around these parts in quite some time, but I hope you weren't one of those let go. Give a shout out if you're still lurking here.

Dec 04, 08 - 04:57 pm Comment from: ChrissyOne

@ Darkness & SirROM

Still employed, but many of the folks I worked with on Elements and Photoshop.com are gone, along with many in tech support. Not sure what the future holds, but it will only make our customers suffer more than they already are.

Thanks for thinking of me.

-c

Oh, and PS- MacDailyNews Take: For years Adobe thought the Mac was dead. They even started banking on it. But, they were wrong. Dead wrong.

You know most everyone here uses a MacBook Pro, right?
This myth is about 6 years past its spoil-by date.

Dec 04, 08 - 05:04 pm Comment from: Quad Core

Maybe the slow reception is from all the pissed-off people who spent a fortune on PowerPC equipment who can't use After Effects CS4.

Dec 04, 08 - 05:04 pm Comment from: Brulek

adobe, microsh*t, autodesk -> the poster children for what happens when you are the 'industry' standard. You get to do what you like (while the herd keeps buying your rubbish anyway). Stop using their products and it will force the change, eventually (you'd hope, but the herd mentality is hard to fight against).

I have become more discerning nowadays-> I don't use software that is rubbish. No acrobat reader, no office, no windows, no IE, etc. and life is so much better! Many peple don't seem to understand that THEY are the agent of change. Unfortunately they seem to become fossilized on certain products and basically see it as better the devil you know then the one you don't. Sad but true, seemingly.

Dec 04, 08 - 05:08 pm Comment from: therealspike

Apple buy Adobe,
Apple clean Adobe,
Apple skin Adobe,
Apple.

Dec 04, 08 - 05:17 pm Comment from: freebeer

Adobe hedged its bet on the AIR as its wedge to move all its products to the cloud, and I bet, concentrated most of its internal development resources. I used to think ColdFusion that Adobe bought from Macromedia has a good blend of ease of use and power, but the cost is so much that, having moved around different organizations, I just don't see new companies buying into it when there are Java/.NET/PHP options that are seen as either more inline with existing enterprise back-end or has more mind-share/resource.

It's understandable that Adobe like any other company wanted to ride to greater desktop market share on Windows. That prompted Apple to invest in its own desktop software to keep relevant and now can compete. When Adobe's strategic ambition becomes clear - take over all platform UI with its Flash plugin - it made itself a target. Now every platform technology company wants to edge out Flash if it can.

Adobe wanted to do too much, unlike Jobs who learn to focus. As a media software company it should be exploding with the Web, but one look at the product line and you see its very undisciplined and the product development totally lacks direction or even polish. If Adobe is not careful it'll end up setting with Sun Microsystems whose Java ambition it once displaced.

Dec 04, 08 - 05:19 pm Comment from: Cubert

C1,
Good to hear. I was just about to post asking if you were still employed but decided to read through first.

If you do get laid off and start looking for a new job, you've always got a bed....errrr....couch to sleep on in Philly if you ever come out this way.

wink

Dec 04, 08 - 05:23 pm Comment from: Darkness

@ChrissyOne...

Excellent news, although it's still sad to hear about your friends and coworkers.

It's been a heck of a week here in Seattle. First Washington Mutual, now Adobe and AT&T;. Not a good time to be looking for work in these parts...

Dec 04, 08 - 05:28 pm Comment from: Gene

I actually think Apple buying Adobe is a good idea. It ought to be fairly cheap right now, Apple has $25 billion in cash, and just think--Apple would own the industry standard of creative software packages. Just about everyone has MS office and just about everyone who does any creative work has some version of Photoshop or Creative Suite. Could be a whole new realm of customers for Apple products. And Steve and team would clean up the interfaces and probably cut the prices to a more reasonable sum. And you can bet the Mac versions of all of these would be released first. Could be a rather inexpensive way to own the software end of the creative market as well as the hardware end for Jobs and Co.

Dec 04, 08 - 05:33 pm Comment from: qka

I've been laid off when my employer was put up for sale. Trimming headcount to make the company more attractive to potential buyers and all that.

Hmmmm. What's going on here?

Dec 04, 08 - 05:58 pm Comment from: Mr. Peabody

Whew, Okay, so C1 one is still alive and well.

Hang in there.

Love,
Mr. Peabody

Dec 04, 08 - 06:14 pm Comment from: ChrissyOne

Thanks everyone.

It's a really weird day. Email traffic is almost nill. I think everyone is in shock. This is the second layoff I've been through at Adobe in as many years and it makes less sense each time it happens.

-c

Dec 04, 08 - 06:35 pm Comment from: other side

What happened to the experts advising Apple to buy Adobe?

MW: gone. How fitting.

Dec 04, 08 - 06:41 pm Comment from: clunker

Maybe it's time for a buy out.

The Adobe execs should race to Washington and beg for an immediate bailout.

$20-$30 billion should do for a while, no?

Dec 04, 08 - 08:13 pm Comment from: Alex McKenna

So, what's a girl to do? Stay with an outdated Quark 6.5 because the last upgrade I got v7. was no good for PDFs...
..or get Adobe CS3 or 4 and use InDesign? Which is crazily over-priced, even updating it from Photoshop.
Why oh why isn't there some reasonable alternative to do magazines?
I really hate Quark as a company, and obviously Adobe is similarly arrogant. (I imagine there are similar nightmares when the Mac dies and you have to re-install all the effing discs and type numbers for half the night..... calling India for codes and suchlike. :-(

Dec 04, 08 - 10:35 pm Comment from: lemecdutex

I decided to go ahead and upgrade to CS4 Design Premium, and I have to say it runs substantially faster than CS3 did. I haven't had time to check out much more than launch speed and a few other things, but it's very obviously more responsive.

I still wish Apple would buy Adobe, bring back FrameMaker Mac, etc. I also thought it wasn't a bad idea to buy AutoDesk.

--Ron

Dec 05, 08 - 12:17 am Comment from: MacRaven

As a former user of PageMaker 1.0 and now CS4 I have watched the CS family of apps go through a lot.

However, I do agree with some posts above, that there is definitely a "Windowish" smell to the CS apps lately. And I don't care if employees are using MacPro's, CS has changed to act more like a typical Winduhz app. Starts with the look and feel of the installation language and menus, to the toolboxes style and the whole look and feel in general. Not as intuitive as it all once was either.

Sad. Very sad. Gone to the Dark Side. Because they got their shorts in a wad over Apple.

But, regardless, pros have to use CS4. What's the other choice to replace InDesign? Quark? * gag * and what replaces the others? Illus. PhotoS. Flash, Dreamweaver, etc.? Nothing else out there, and the advantage is they all work together.

Hopefully Adobe and Apple will make piece again. Or as Apple regains market share, Adobe will wake up and get out of bed with Microsoft.

Dec 05, 08 - 12:33 am Comment from: twilightmoon

jonricmd "If someone would come up with a "Photoshop Killer" for the Mac (all the current image manipulation programs are limited in one way or another IMHO), they would absolutely lose the whole Mac market!"

I don't know if Adobe could lose the Mac market that easily, but I do know that if they did they'd be in serious trouble of going bankrupt as a company.

It would be a serious financial blow to them, and at minimum would cost the top management their jobs. It's amazing to me that they act as if the Mac market doesn't even matter to them.

Dec 05, 08 - 12:40 am Comment from: twilightmoon

MacRaven "Hopefully Adobe and Apple will make piece again. Or as Apple regains market share, Adobe will wake up and get out of bed with Microsoft."

The problem isn't Adobe's antipathy towards Apple or ambivalence towards the Mac platform per se, its that they have gotten away from elegant powerful programs and are now coasting on past success, only adding minimal features. The bloat factor has gotten bad too, with no consideration for streamlining or optimization, preferring generic code that works the same across multiple platforms.

If they could just focus on making their Mac programs great *on the Mac* and not be so in bed with cross platform parity, they could make excellent Mac products.

The reason I think a lot of people wish Apple bought Adobe is they think that Adobe has lost their zen for creating Mac software and that Apple could do it better with more focused results that showcased the Mac technologies that Adobe ignores.

I've all but given up hope in Adobe, but as you stated, there's no real alternatives out there that are acceptable. If there was Adobe would be in serious trouble as a company.

Dec 05, 08 - 12:49 am Comment from: twilightmoon

C1 "You know most everyone here uses a MacBook Pro, right?
This myth is about 6 years past its spoil-by date."

The myth has truth in it. Adobe doesn't utilize Mac specific technologies preferring cross platform homogeny over superior platform specific experiences. This hurts Mac users far more than MS Windows users since MS doesn't focus on graphics or design in their platform.

Beyond this as stated by others the look and feel of CS has taken on a far more "Windows" look than it had in the past.

From personal experience I'd say that the software has some great features but is too bloated. I wish they'd focus more on making the programs streamlined, bug free, crash free, with platform native installers (not home grown terrible ones), and finally demonstrate fully that Adobe cares about the Mac platform and doesn't just see us as an automatic revenue source.

Abandoning their booth at MacWorld was a terrible PR move as an example.

Dec 05, 08 - 12:49 am Comment from: twilightmoon

Oh and Im glad you didn't get laid off C1.

Was thinking about that too.

Dec 05, 08 - 12:56 am Comment from: twilightmoon

clunker: "The Adobe execs should race to Washington and beg for an immediate bailout."

Just make sure they hitchhike to get there, and wear threadbare clothes. Symbolism and imagery is all that matters today..

Dec 05, 08 - 04:41 am Comment from: Yours Smugly

Time to buy Adobe, Apple.

Oh, and hi ChrissyOne!

Dec 05, 08 - 09:57 am Comment from: Observer

Been posting on this forum for years, and must say you guys are funny with ChrissyOne. Anyone else comes and goes and comment and it's a non-event. (Except for ZuneTang of course ; )

Just shows what imagery can do, you throw a female name in, (and it doesn't hurt to have the TV show's Three's Company hint of jiggle in your screen name) and you get all the guys a twitter hanging on every word and move.

Good for Chrissy to reveal her femaleness in a male dominated field, but I think there are many females posting here, under generic names, because as females they weren't taken as seriously as Chrissy is.

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