Adobe said Tuesday that it’s going to restructure and let 750 people in North America and Europe go, 7% of its workforce, to focus on products that create digital content on multiple devices and platforms and digital marketing.
In other words, its newfangled Creative Cloud, due out next year, and the Omniture-Demdex-Auditude side of the business.
“Our mission is to produce the world’s content and maximize the impact of that content,” Adobe CEO Shantanu Narayen said in a statement.
Adobe will cut its investment in enterprise software. It’s reportedly shutting down remote US development locations and getting ready to move more of the next release of Creative Suite (CS) development to India and China, suggesting that the sunset of Flash as we know it is commencing.
Flash will be replaced by HTML 5 helped along by Adobe’s recent acquisition of HTML 5 house Nitobi Software.
ZDNet says Adobe has quietly told developers that that development of its mobile Flash browser plug-in will stop. Current Android and RIM’s Playbook configurations will get critical bug fixes and security updates. Otherwise, Adobe “will no longer adapt Flash Player for mobile devices to new browser, OS version or device configurations. Some of our source code licensees may opt to continue working on and releasing their own implementations.” The company will focus instead on tools for creating mobile apps by packaging the code to run on Adobe AIR.
Sounds like a win for the late lamented Steve Jobs.
By Wednesday Adobe had blogged about its decision at
http://blogs.adobe.com/conversations/2011/11/flash-focus.html. It sayd Flash development for PC will continue.
The move will reportedly take six months to play out. People are supposedly being told to finish and ship CS6, find another job in the company if they can, or get lost. Sounds like after CS6 ships, especially if the next two quarters aren’t exactly swell, Adobe might can more people.
At the moment Adobe expects to take a restructuring charge of $87 million-$94 million, primarily for severance. And because of the charge it cut Q4 guidance from 41 cents-50 cents a share down to 30 cents-38 cents a share. As a result, its stock capitalized after-hours dropping 9% to $27.69.
Immediate revenue guidance was unchanged at $1.07 billion-$1.12 billion but next year revenue could be 4%-5% lower. Wall Street expected 2012 revenues to be up 9%.
With the changes, Adobe expects to drive “faster and more predicable growth in FY2013 and beyond.”
read more