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Adobe shuts down for the week

Adobe announced it has shut down its entire North American operations for one business week to help cut costs as the global economy continues to hurt the American tech company. 

The week-long shutdown started on June 29, with business expected to return to normal starting Monday, July 6, though the company has already carried out several cash-cutting moves in the past.  For example, spending on travel and bonuses have both been slashed according to CFO Mark Garrett, with further cost-cutting in the works.

Adobe officials didn't announce how many of its employees will be affected by the shutdown this week – also, no one disclosed how much money the company expects to save from the week off.

Last December, the company announced it would lay off around 600 employees; however, it has re-hired 260 employees outside of the United States.

Adobe has already done this once before, and has one more scheduled week of shut down scheduled before the end of the year.  Furthermore, the company traditionally shuts down for a week between Christmas and New Year's Day, which will also take place like normal.

Adobe is still profitable, but it has seen sales dip due to the economy.

"In the second quarter of fiscal 2009, Adobe achieved revenue of $704.7 million, compared to $886.9 million reported for the second quarter of fiscal 2008 and $786.4 million reported in the first quarter of fiscal 2009."

Adobe has Flash, Acrobat, Illustrator, Dreamweaver, Photoshop, and several other popular pieces of software, but must find ways to attract new consumers at a time when many developers and consumers are cutting back on spending.



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Hm....doesn't add up
By Regs on 6/30/2009 7:11:07 PM , Rating: 4
When my company shuts down for even a day we lose money. Inventories go to waste, research derails, productivity goes down the drain, suppliers get pissed why we werent able to take deliveries, accounts payable can't pay the bills, large meetings get postponed for weeks, the work load compiles, and the list continues. Are we talking about a complete operational shut down? Does not make sense, especially when they still have to pay salaries to people who are not working.

I can see this working for a manufacturing line with high variable costs (GM), but a software company that has a lot of fixed costs, what will shutting down for a week help?




RE: Hm....doesn't add up
By Jackattak on 6/30/2009 7:17:55 PM , Rating: 2
The only way I see this as being a money-saver is *if* they aren't paying their employees for the week they're shutdown. And I highly doubt that's happening, lest there be an inevitable lawsuit in Lawsuit-Crazy America.

Could they be doing it to save money on power? Can Adobe's power requirements be that great that this move would actually save them $$$?

I doubt that, too.


RE: Hm....doesn't add up
By stromgald30 on 6/30/2009 7:53:07 PM , Rating: 5
quote:
And I highly doubt that's happening, lest there be an inevitable lawsuit in Lawsuit-Crazy America.


Um, that's been happening all across America. Especially with state jobs in states with budget issues due to the bad economy. They call it 'furlough'. It's basically a temporary layoff where they don't pay employees.

The US may be lawsuit-crazy, but it's within a company's right to layoff people due to money constraints. Complaining/lawsuit doesn't help things because the company either pays you (employee) and goes out of business, or forces everyone to take a mandatory pay cut / temporary layoff. I think most people prefer the latter.


RE: Hm....doesn't add up
By camylarde on 7/1/2009 6:03:32 AM , Rating: 3
GM guys didn't seem so.


RE: Hm....doesn't add up
By Mitch101 on 7/1/2009 8:51:56 AM , Rating: 2
Bad economy or not you Pull a weeks pay to cut costs from quality people and those people will begin to find work elsewhere or start their own company. It looks like a good decision on paper but in the end company loyalty gets lost especially when a company remains profitable and didn't need to do something like this.

Its better to cut pay rates slightly than to force people to a week off. Those who need that income working week to week get slammed by this. Those who go through pay slight pay cuts find ways to cut corners but still make ends meet if they begin to sink they can still recover with a little extra work.

Most of the smarter companies in trouble are freezing 401k and stock matching programs because they know this is not income used today to pay your mortgage, car payment, utilities, etc.

Everyone watches that bottom line and if employees got cuts and profits increased your company loyalty goes out the door along with the talent.


RE: Hm....doesn't add up
By FaaR on 7/1/2009 4:28:19 PM , Rating: 2
Perhaps within their right, but it's not exactly a smart move screwing over your employees like that. Besides, what money constraints? Adobe's still profitable as the original article states. That means they're still able to pay all their running costs and still have room to spare.

Anyway, I wouldn't mind seeing a law banning Adobe from shutting down period - regardless of reason - until they've fixed their lousy flash plugin that's causing my browser tabs to crash or stop responding with maddening regularity (sometimes hanging the entire browser for upwards of half a minute).


RE: Hm....doesn't add up
By talozin on 6/30/2009 7:24:05 PM , Rating: 5
I've worked for several companies that had temporary shutdowns. A better way to phrase them is "mandatory vacations". You can burn your own vacation time and get paid, or you can keep your vacation time and not get paid.


RE: Hm....doesn't add up
By rs1 on 6/30/2009 7:47:33 PM , Rating: 3
Or you can pad the mandatory time with a week of paid vacation before, and another week of paid vacation after, and take an extra-long vacation that you mostly get paid for.


RE: Hm....doesn't add up
By Jedi2155 on 7/1/2009 2:07:40 AM , Rating: 4
lazy bum.


RE: Hm....doesn't add up
By psychobriggsy on 7/1/2009 6:50:43 AM , Rating: 4
Hmm, I'd give up 1/50th of my wage to get a week off work unpaid in the middle of summer. As long as I was given adequate notice, of course. It's better than any pay cut over 2%, and I get time off.


RE: Hm....doesn't add up
By FaaR on 7/1/2009 4:30:37 PM , Rating: 2
Move to Europe. Many countries mandate several weeks of paid vacation time per year. :P


RE: Hm....doesn't add up
By robinthakur on 7/2/2009 9:24:45 AM , Rating: 2
I thought everybody gets paid vacation time? At my UK based employer, we get 28 days per year off plus bank holidays all paid. Surely you're not saying that you don't get paid when you're on holiday in the US?!? I suppose logically that makes sense, but I prefer the European way thanks. More time to have a decent life outside of work...


RE: Hm....doesn't add up
By callmeroy on 7/1/2009 3:35:37 PM , Rating: 3
I worked for Indy Mac Bank (read back in the news archives at a major newspaper read the business section headlines - go back to about April / May of '08 -- yeah THAT bank...).....

They did exactly that as well during the beginning phases -- where you certain departments were told to take mandatory vacations of a week or two -- and unless they used vacation time they didn't get paid.

Then after that they started phases of layoffs....there were 3 in total each a couple months apart. Each phase got worse and worse.....everyone was sad when the first phase of employees were let go, little would anyone know they actually were the lucky ones --- phase 1 layoffs god paid their vacation time, a severance package and the company paid for 3 months of Cobra medical benefits. Phase 2 --- you only got a severance if you were there 4 years or longer, still got 3 months Cobra though and vacation time, Phase 3 - no severance at all, got vacation time paid , but no cobra.

I survived all three phases surving the transition of Indy Mac being public coporation to Indy Mac being taken over and controled by the FDIC. Once that happened the Warren Act helped me out by guaranting me 3 months pay and I believe I got 1 month of Cobra paid by them too.

I went off on a tangent but basically -- yeah a company 100% has the right to lay you off temporarily w/o pay (of course) and then bring you back....you have the right to terminate your own employment as well.


RE: Hm....doesn't add up
By Oregonian2 on 6/30/2009 7:47:28 PM , Rating: 2
quote:
what will shutting down for a week help?


Either the employees will take vacation or will take unpaid time off. In both cases the company gains.

In the unpaid time off the savings are obvious.

In the case of vacation, "savings" are still there. Reason is that the expense of vacation hours are paid (in the books) when they are accrued, not when used. So when an employee takes vacation, they're not being paid (like those taking unpaid leave). Their vacation paycheck is coming out of money that has already been "spent" by the company upon accrual.

Assuming that it works most places like places I've worked before.


RE: Hm....doesn't add up
By micksh on 6/30/2009 7:57:12 PM , Rating: 2
They will not lose financially from shut down. What will be the result - Flash x64 client, Flash acceleration, iPhone client, etc will get postponed, so what? All these are supposed to be free anyway. Heck with customers, they have been waiting for so long, they will wait more.

Adobe doesn't have inventories that can be wasted. Boxes with software are probably pre-printed to provide months worth of supply.

They will save on electricity bills. They also will reduce liabilities to employees by burning their vacation days. If employee is laid off his unused vacation has to be paid, such liabilities are somehow reflected in financial reports. Reducing it will improve statistics a little.

Cheap move but it may add a few cents to stock price in the end of quarter.


RE: Hm....doesn't add up
By OCedHrt on 7/1/2009 1:34:09 PM , Rating: 2
Frequent occurrence in silicon valley. The save money by writing off your vacation which is a liability on their books.

Of course, you have the option to not use vacation and claim unemployment for the week. Then they save money but not paying you.

And, your deadlines most likely do not change. So win-win-win for the employer.


You've Gotta Be Kidding Me...
By Jackattak on 6/30/2009 7:03:10 PM , Rating: 5
quote:
Adobe has Flash, Acrobat, Illustrator, Dreamweaver, Photoshop, and several other popular pieces of software, but must find ways to attract new consumers at a time when many developers and consumers are cutting back on spending.


Hmmm, maybe like coming up with a better pricing schematic? Would probably cut-down significantly on pirating, as well. Making your products prohibitively expensive to small businesses and sole proprietorships I not a great business model.

I have ZERO sympathy for Adobe. Cry me a freaking river.




RE: You've Gotta Be Kidding Me...
By dagamer34 on 6/30/09, Rating: -1
RE: You've Gotta Be Kidding Me...
By Jackattak on 6/30/2009 7:47:56 PM , Rating: 5
You don't have the slightest clue what you're talking about.

1) TPB "died" in 2006 and has been "owned" by a company outside of Sweden ever since.

2) If you think that TPB "going legit" will have any influence on the pirating community whatsoever, I have a bridge to sell you in Brooklyn.


RE: You've Gotta Be Kidding Me...
By Jackattak on 6/30/2009 7:48:12 PM , Rating: 2
You don't have the slightest clue what you're talking about.

1) TPB "died" in 2006 and has been "owned" by a company outside of Sweden ever since.

2) If you think that TPB "going legit" will have any influence on the pirating community whatsoever, I have a bridge to sell you in Brooklyn.


RE: You've Gotta Be Kidding Me...
By taber on 6/30/09, Rating: -1
RE: You've Gotta Be Kidding Me...
By stromgald30 on 6/30/2009 7:55:24 PM , Rating: 3
ThePirateBay != software pirating

When one goes down, many more will spring up in it's place.


RE: You've Gotta Be Kidding Me...
By EricMartello on 7/1/2009 1:03:36 AM , Rating: 1
The one thing about TPB taking their trackers down, that is essentially pulling the rug out from under sites like Mininova, whose torrents rely heavily on TPB's tracker...sure it will be replaced and it was not the only tracker out there, but it was no doubt the largest.

As for Adobe, yeah who doesn't pirate their shite? There are a lot of people who could use their software but cannot afford it so what else can you do? =)


RE: You've Gotta Be Kidding Me...
By Ryanman on 7/1/2009 1:22:39 AM , Rating: 2
They say their prices are high due to piracy, but they were cost prohibitive long before it became a problem.

To be honest with you, I would LOVE to purchase the suite for 250 bucks. But as it stands, with me doing ZERO money making, I'm going to keep a CS master suite torrent on my desktop for years to come.

Why don't the offer creative licenses? Student licenses are STILL out of reach of anyone with a brain in their head. Who would spend 600 bucks on a program just to mess with pictures?!?
I know it's more powerful for that, but for a recreational activity I can't spend that much. I'd like to pay for it to ensure I get more updates/support but as it stands.... meh.


RE: You've Gotta Be Kidding Me...
By nwrigley on 7/1/2009 2:15:43 AM , Rating: 2
Unfortunately it's difficult to have a come up with a "you make money vs. you don't" pricing structure. I'm with you though - if I'm not making any money using their software then I don't feel bad about pirating it.


RE: You've Gotta Be Kidding Me...
By BZDTemp on 7/1/2009 4:12:42 AM , Rating: 2
Hmm. How about games then?

I'm sure you do not make any money with those so does it mean you pirate them?

At the very least I think one must pay for software that is used as intended i.e. if you are using pro productivity software then pay and if you play games you pay. After all paying is like voting for more of that type of software to be made.


RE: You've Gotta Be Kidding Me...
By FaaR on 7/1/2009 4:50:36 PM , Rating: 2
I haven't stumbled over any $600 games lately. Granted, there was the Neo*Geo of course, but that was a while ago (and even those games didn't cost THAT much! ;)

It's hard to legitimately claim games are too expensive to afford if one can still afford a computer to run them on, pirating games is simply because of stingyness, and many people would still pirate games if they only cost ten bucks.


RE: You've Gotta Be Kidding Me...
By Ryanman on 7/2/2009 3:01:27 PM , Rating: 2
Nobody mentioned Pirating games. $40 is a far cry from thousands, in the case of 3DS Max or the Master Suite for CS4.

It's a question of intended use. It's not even making money - if I was publishing art on a regular basis I'd feel obligated to pay for Adobe's stuff. Since I'm playing games, and paying for future patches and content (Orange Box anyone?) I rarely, if ever pirate.
Pirated the Sims 2, but that's it I think. EA sucks.


RE: You've Gotta Be Kidding Me...
By Samus on 7/1/2009 5:34:21 AM , Rating: 1
You can buy Adobe Acrobat 9.0 OEM (example, with Dell systems) for $30 bucks. Pretty reasonable for such a useful product.


RE: You've Gotta Be Kidding Me...
By FaaR on 7/1/2009 4:54:46 PM , Rating: 2
<pedantic> Either: "$30". OR: "30 bucks". Not: both at once. </pedantic>


Big changes on the horizon
By Beenthere on 6/30/09, Rating: 0
RE: Big changes on the horizon
By boobot on 7/1/2009 7:20:18 AM , Rating: 2
Nothing new here. I work for one of the largest IT companies and we have been shutting down a week for Christmas for 5+ years(sometimes the week of July 4th). Although this year it's two weeks at Christmas forcing folks to burn vacation or basically go unpaid.


By ZachDontScare on 7/1/2009 12:54:29 PM , Rating: 3
The worst in history? oh, please... read a history book. Our current economy is absolute paradise compared to what things were like in the Great Depression. People need to get some historical perspective. This recession isnt even as bad as those of the 70s.


Maybe if they adopted x64 and/or 2009
By Lord 666 on 6/30/2009 7:13:31 PM , Rating: 2
Seriously, where is the Flash x64 client?! Apple iPhone?




By xmichaelx on 6/30/2009 7:38:59 PM , Rating: 2
Adobe's been coasting for a long time. Yes, they still have a lot of top products, but really need some innovation.

One idea: Dreamweaver becomes less and less important as everyone moves to CMSs, so how about taking over Drupal development and selling support? They'd make a killing in the enterprise and education sectors, where everyone's open-source shy but willing to spend big on crappy, proprietary systems. And unlike products, support stays profitable forever.


Cutting one day a week
By Shig on 6/30/2009 8:25:13 PM , Rating: 2
A few companies have just cut friday off from the entire work week, and then pay their employees 20% less. If you complain, go find another job.

I also know TARGET cut hours in their photo department as well as weekday hours. I think they close the stores an hour earlier all around Chicago as of late.

When is it going to get better mr obama? :(




RE: Cutting one day a week
By Jackattak on 7/1/2009 10:58:50 AM , Rating: 2
Yes, clearly this is Obama's fault.


How is this for an idea?
By GTaudiophile on 6/30/2009 9:48:26 PM , Rating: 2
How about lower your prices to SANE levels and see what happens? Put your CS4 Suite at around $500 or so (instead of closer to $2K) and I would buy!




By psychobriggsy on 7/1/2009 6:57:59 AM , Rating: 2
Damn right. They should create a "CS4 Home" without some of the high-end features that businesses need that costs a lot less.

As it is, 95% of home users will pirate or use something else. They're losing an entire market, and if the users use something else, they'll use that other product in their next job, and that's a business license lost.


By PandaBear on 6/30/2009 10:16:17 PM , Rating: 2
Sandisk is doing 1 day every 3 day weekend and 1 week during Xmas.

I've seen my friend who got 2 weeks of shutdown per quarter, that's gonna hurt.




By psychobriggsy on 7/1/2009 7:04:38 AM , Rating: 2
That's pretty harsh, certainly in my job an effective 20% pay cut would mean major lifestyle changes (especially coming from a year before where there was a significant bonus). It's always the employees that take the hit when business goes bad, yet when business is good it's the bosses that take gross bonuses and let minor bonuses filter down. Maybe the businesses could give some shares (when they're at a low price) to compensate.


By CurseTheSky on 6/30/2009 6:59:50 PM , Rating: 3
quote:
Last December, the company announced it would lay off around 600 employees, though has re-hired 260 employees outside of the United States.


:(

I have to hand it to them though, at least they're still profitable.




By neothe0ne on 7/1/2009 1:21:33 AM , Rating: 2
but "one more scheduled week of shut down scheduled"? Seriously?




Sorry. This is all my fault...
By Daphault on 7/1/2009 9:50:43 AM , Rating: 2
I haven't upgraded my CS3 to CS4 yet. Sorry Adobe guys.




Sending jobs overseas.
By wallijonn on 7/1/2009 2:21:48 PM , Rating: 2
quote:
Last December, the company announced it would lay off around 600 employees; however, it has re-hired 260 employees outside of the United States.


Hmmm. Maybe Adobe needs to find an English speaking country with no taxes. Then they can move all their employees and pay them bottom dollar and not worry about things like vacations, medical benefits, pension plans, compensation packages, insurance, maternity leave, sick leave, etc. Belize comes to mind. They probably wouldn't like Canada or Britain.

They're making some $700MM per quarter and they're hurting? That's about $3B a year, is it not? Exactly how many employees do they have? 50,000? What are they paying them, on average?




"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer

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