Adobe Systems Inc has announced that it will be cutting between 240 and 300 of its staff as part of a restructuring designed to reduce costs by 8%-10% per annum. The San Jose-based desktop publishing and document management software company will also be realigning its divisions to bring about closer ties between marketing and product development functions. All of the engineering and marketing functions now report to new executive vice president Bruce Chizen, who in turn reports to chief executive officer John Warnock. Adobe has also axed three executive positions and the people who held them: EVP and chief administrative officer, EVP of marketing and EVP, product divisions. The company also announced that Harold Covert, VP of finance and operations, has been promoted to EVP and chief financial officer. The staff cuts are expected to allow Adobe to realize an expense reduction in the neighborhood of $50m – $60m per annually. News of the restructuring activity comes as the company also warned that its third-quarter numbers will be disappointing. Based upon preliminary analysis, Adobe said revenue is likely to be in the range of $220m – $225m, compared with $230m reported in the year-ago quarter. Operating expenses in the quarter should to be relatively flat with the second quarter, but adverse economic conditions in Japan are being pointed to as a reason for the poor performance. After a one-time restructuring charge, and other non-recurring expenses, the company expects net income may approach break-even or a loss, compared with net income of $53.4m for the year-ago quarter. The year-ago quarter included one-time gains of $12.9m from Adobe’s sale of shares in Netscape Communications Corp. Full results for the quarter will be announced on September 24. Analysts surveyed by First Call had been expecting net income of $0.52 per share.
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