Adobe Systems Inc, the world's largest maker of graphic design software, surprised industry watchers on Tuesday by announcing that it would eliminate 750 jobs – over 7 per cent of its workforce – as it shifts focus to programs that enable digital publishing and web advertising while lessening investment in other products.
The job cuts will be mostly in North America and Europe, and will cost $87 million to $94 million before taxes; leading to slower-than-expected revenue growth next year, the company said in a statement.
The costs include $73-78 million of charges in the fiscal fourth quarter, which ends 2 December. After the costs, net income will be 30-38 cents a share, compared with a previous forecast of 41 cents to 50 cents, as revenue growth dips 4-5 per cent below earlier forecasts, it said.
The San Jose, California based company saw its shares crash by 9 per cent to $27.64 after the late-Tuesday announcement.
Adobe is globally known for its Flash and Acrobat software and Creative Suite of design programs like Photoshop, which most computer users cannot do without.
Chief executive officer Shantanu Narayen and other executives are scheduled to hold presentations for financial analysts in New York today (eastern US time). The software company is aiming to gain ground in the market for tools that use the HTML5 programming language and software for cloud computing.