Adobe to lay off 750 workers, restructure around digital media, marketing

The company made famous by the ubiquitous Flash Player and multimedia software like the Adobe Creative Suite has announced its plans to eliminate 750 full-time positions in attempts to reposition itself as a leader in digital media and marketing. In two separate press releases, Adobe gave a glimpse into the restructuring, which it will cover in-depth at a financial analysts meeting in New York tomorrow. The company expects the plan to result in pre-tax charges somewhere in the ballpark of $87 million and $94 million, a large chunk of which will come from expenses "related to employee severance agreements."

According to one of the two press releases, the master of Flash plans to continue offering the Creative Suite as well as expanding "tablet-based touch apps" and cloud-based software. It's also promised to invest further in HTML 5 through tools like Dreamweaver, the recently announced Edge and PhoneGap, which it acquired with the purchase of Nitobi. Despite the shakeup, Adobe expects to meet its previous Q4 projections of between $1.075 billion and $1.125 billion. A bunch of corporate what-nots await you in the dual press releases after the break.

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Adobe Reaffirms Fourth Quarter FY2011 Revenue Target, Restructures to Align Business around Digital Media, Digital Marketing
For immediate release

SAN JOSE, Calif. - Nov. 8, 2011 - Adobe Systems Incorporated (Nasdaq:ADBE) today provided a business update for its fourth quarter fiscal year 2011, ending Dec. 2, 2011. The company also announced plans to further align its business around the explosive growth categories of Digital Media and Digital Marketing solutions.

Adobe Restructures to Align Business around Growth Opportunities
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.

See separate release issued today for more information regarding the company's strategy and goals with its business realignment.

Adobe Reaffirms Fourth Quarter FY2011 Revenue Target Range
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.

Based on the impact of the restructuring charge discussed above that the company expects to take in the fourth quarter, Adobe updated its targeted GAAP diluted earnings per share range to be $0.30 to $0.38 in the quarter. The company had previously targeted a fourth quarter diluted earnings per share range of $0.41 to $0.50 on a GAAP basis.

Adobe continues to target a diluted earnings per share range of $0.57 to $0.64 on a non-GAAP basis in the fourth quarter. A reconciliation between the company's GAAP and non-GAAP financial targets is provided at the end of this press release.

Adobe plans to report its fourth quarter results on Dec. 15, 2011 after the market closes.

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Adobe to Outline Growth Strategy at Financial Analyst Meeting

SAN JOSE, Calif., Nov 08, 2011 (BUSINESS WIRE) -- Adobe Systems Incorporated ADBE -9.04% will host a Financial Analyst Meeting tomorrow in New York, where company executives will outline its strategy to target the explosive growth categories of Digital Media and Digital Marketing and its plans to drive long-term revenue growth. Adobe will also comment on its business update for its fourth quarter, ending Dec. 2, 2011. See separate release.

Company Focuses on Digital Media, Digital Marketing Opportunities

Moving forward, Adobe will offer customers the ability to make, manage, measure and monetize content and applications across all devices. The company has long been the leader in content authoring solutions with its Adobe Creative Suite(R) product franchise. Its Digital Media growth strategy revolves around its recently announced Creative Cloud and will enable the company to rapidly deliver new product capabilities and services; penetrate untapped market segments; and increase overall engagement with customers. 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(R) 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

While Adobe's Digital Media business centers on content creation and publishing, its Digital Marketing business is focused on enabling customers to maximize the impact of their digital experiences across devices and media types. Adobe's Digital Marketing growth agenda is focused on becoming a mission-critical solution provider and partner to marketers. Key elements include:

-- Extending Adobe's leadership in analytics and reporting to drive rapid growth in new areas like mobile and social

-- Personalizing digital experiences across all digital channels, ensuring that customers can deliver the most relevant, customized content in real time

-- Driving multichannel campaign management, enabling marketers to make informed decisions about all aspects of a marketing campaign, from search to email to display advertising

-- Accelerating media monetization solutions for content publishers by enabling them to segment their audiences and maximize their advertising revenue, leveraging the company's acquisitions of Demdex and Auditude this year

"Our mission is to produce the world's content and maximize the impact of that content," said Shantanu Narayen, Adobe president and CEO. "Adobe is doubling down in the Digital Media and Digital Marketing categories, markets rich with opportunities for innovation and growth."

Company Unlocks Potential for Higher Revenue Growth

Moving into FY2012, Adobe will focus its research and development and sales and marketing investments on these two opportunities. In Digital Media, the company expects to attract new customers and increase recurring revenue through its new subscription offering. In order to drive increased Digital Marketing bookings, which are recognized as recurring revenue, the company will reduce its investment, and expected license revenue, in certain enterprise solution product lines. These changes will reduce FY2012 revenue growth by approximately four to five percentage points. As a result, the company expects annual revenue growth of approximately four to six percent in FY2012. However, the company expects non-GAAP operating margins in FY2012 to be similar to those it will achieve in FY2011. Beyond FY2012, the company anticipates double-digit revenue growth with an increasing percentage of recurring revenue.

"We believe that by focusing resources on two large initiatives and shifting our business model, we can drive faster and more predictable growth in FY2013 and beyond," said Mark Garrett, Adobe executive vice president and CFO.

Company executives will discuss more details about Adobe's growth potential and business model adjustments at tomorrow's Financial Analyst Meeting.

Adobe to Webcast Its 2011 Financial Analyst Meeting in New York

Adobe will provide a live webcast of its Financial Analyst Meeting tomorrow.

The live video webcast will last approximately seven hours. For those unable to watch the live webcast, an archive of the event will be available on Adobe's Investor Relations website for a limited time. Listening to the live webcast via Adobe Connect requires Adobe Flash Player version 10 or later. Firewalls designed to protect corporate information can prevent access to the webcast.