Graphics and desktop publishing software giant Adobe Systems Inc will cut 250 staff, or 9% of its total workforce, in a restructuring the company said is designed to enhance operating efficiencies and keep earnings healthy. San Jose-based Adobe said 40% of the job cuts will come from its international operations, with the majority a result of the closing of its European headquarters in Edinburgh, Scotland. All the cuts are expected to be made before the end of the calendar year.
The moves will result in a restructuring charge of $15m, which is expected to be offset by non-operating income. Adobe says the savings realized from the workforce reduction – which it declined to specify – will be used to increase investment in e-business software and related sales and marketing programs. Later this year, the company promises an aggressive worldwide e-business initiative, but gave no specific product or marketing plans.
Adobe also announced yesterday that, based on a preliminary analysis of the second quarter ending June 4, operating earnings should come in slightly above the $0.62 to $0.66 per share guidance that it issued in March. Earnings were boosted by revenue that will hit the high end of Wall Street estimates at $245m to $246m. Analysts surveyed by First Call were looking for second-quarter earnings of $0.64 per share. The company also reiterated its commitment to 15% annual revenue growth and a 25% pre-tax operating profit.
