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Adobe is the latest Silicon Valley company forced to cut jobs

Adobe Systems announced it is cutting 600 employees, or about eight percent of its workforce, as the company tries to restructure during a weakening global economy.  The job cuts will be spread through offices across the world.

"The global economic crisis significantly impacted our revenue," said Adobe CEO Shantanu Narayen.  “We have taken action to reduce our operating costs and fine-tune the focus of our resources on key strategic priorities.”

Narayen said his company is facing something the whole world is experiencing.

The job cuts are because of the slumping economy and slowing demand for its software products.  Adobe blamed "weaker-than-expected demand" for Creative Suite 4 as the main culprit behind struggling software sales.

CS4 was originally promoted as Adobe's biggest product introduction ever, although sales numbers indicate that obviously isn't the case.

Adobe predicted its fourth-quarter revenue to be $925 million to $955 million, but it's likely to range from $912 million to $915 million, according to the company.  In a previous quarter, Adobe forecast revenue of $800 million to $850 million, which is much lower than the predicted analyst numbers from $846 million up to $1.02 billion.

The company's earnings per share are between 45 cents and 46, up from 38 cents at the same time per year.  Despite the drop in revenue, the earnings per share are higher because Adobe has been cutting costs. Adobe will offer more details about the job cuts and restructuring during an earnings conference call on Dec. 16.

Adobe joins the likes of Sun Microsystems, Yahoo, eBay and Applied Materials, which have all been forced to announce layoffs because of the economy.

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By strikeback03 on 12/4/2008 2:42:57 PM , Rating: 2
Doesn't help that Photoshop CS4 at least has been viewed so far as somewhat buggy, and some users are holding off on upgrading yet.

RE: Buggy
By Mitch101 on 12/4/2008 2:57:11 PM , Rating: 5
Here is a thought how about Adobe make their products affordable instead?

I would like to own some of the adobe products but prefer to buy a car instead.

RE: Buggy
By Inkjammer on 12/4/2008 3:12:11 PM , Rating: 5
Here is a thought how about Adobe make their products affordable instead?
Adobe products are expensive, but the people who are trained to use them can turn them around for straight cash. As a former (yes, former) graphic designer and animator, the costs are easily justified given what you can get back from it. It's a worthwhile investment for the graphic professional.

There's also a metric buttload of alternatives to Adobe products on all levels, too. On the art scene, there's Art Rage, Paint Shop Pro, Painter, on the illustration scene, there's Xara, InkScape, DrawIt and so on.

RE: Buggy
By headbox on 12/4/2008 4:16:48 PM , Rating: 3
Right- Adobe Creative isn't meant for people who want to touch up their digital photos and make wedding videos.

RE: Buggy
By Solandri on 12/4/2008 4:26:37 PM , Rating: 2
Also, their upgrades are pretty reasonably priced IMHO for basically the best in class commercial software. If you're tight on money but want Adobe's software, buy an old version of Photoshop in eBay for $5, then buy the upgrade to the latest version. I bought a used full version of PS over 10 years ago from a place I did some contract work for, and have been upgrading every other release ever since. The cost is not that much for the features and capabilities it provides.

The alternatives listed above are pretty good too. You can save money going that route as well. The suites are a different story; but if you need a suite you're almost definitely working in the field professionally and buying the suite is a good business decision. What I said about upgrades also applies to suites.

RE: Buggy
By Clauzii on 12/4/2008 8:25:14 PM , Rating: 2
I'm still using my (rather old now) copy of Photoshop CS which will pretty be able to do what I'll need for 2D the next 2-3 years.

Stuff like this:

RE: Buggy
By Darthvoy on 12/5/2008 6:42:26 PM , Rating: 2
I agree... I always buy the upgrades when they come out and they usually pays for themselves after one job...I do sites on the side.

RE: Buggy
By Inkjammer on 12/4/2008 3:14:23 PM , Rating: 2
And not that I endorse piracy, but most people who can't afford Adobe apps tend to get them at the Pirate Bay discount or legally via Student discount pricing (which is fairly reasonable over all). So there's always options. :)

RE: Buggy
By Etsp on 12/4/2008 4:02:41 PM , Rating: 3
or they use GIMP.

RE: Buggy
By Etsp on 12/5/08, Rating: 0
RE: Buggy
By Spivonious on 12/5/2008 10:03:28 AM , Rating: 1
Haven't used it, but from what I've heard GIMP has about 10% of the functionality of PS.

RE: Buggy
By Murloc on 12/5/2008 3:08:54 PM , Rating: 2
you can't compare gimp to photoshop, it's like a toy plastic car compared to a porsche.

RE: Buggy
By mindless1 on 12/7/2008 10:45:38 PM , Rating: 2
It's more like comparing a free app that does most of the things people want to do, with an obscenely expensive bloated virus.

RE: Buggy
By Chaotic42 on 12/7/2008 11:58:16 PM , Rating: 2
It's absolutely nothing like that. Adobe isn't perfect, and I really hope the people who get laid off are the ones who designed the crazy ass look of CS4, but Photoshop is well out of GIMP's league.

I use Photoshop every day at work. It's the third app I start up in the morning and the last one I close. Calling it an "obscenely expensive bloated virus" either shows that you are ignorant, trolling, or both.

GIMP does have some nice features, but trust me, it's no Photoshop. I've tried integrating into our work flow. Yikes. It may work fine for most users, but Photoshop isn't aimed at mom and dad.

RE: Buggy
By mindless1 on 12/13/2008 3:28:38 AM , Rating: 1
Adobe apps are a virus. I don't give permission for crap to run in the background so it loads faster, or checks for piracy, or whatever other excuse they make.

Adobe distributes malware. No system is better off having anything adobe wrote on it. For free.

Photoshop? Let me guess, you got used to using an old, less obtrusive version, and with each new revision you made only small adjustments. If that is a good compromise for your needs, ok, but for the average person who isn't a fan, this is nonsense. Bullshit. Ridiculous.

You wrote "it's not photoshop". Yes that is good. Please get a grip, you wrote it's not aimed at mom and dad as if that means advanced users. WRONG! Only stupid people who can't decide or learn and have someone else footing the bill pick photoshop (or they pirate it, which has nothing to do with value).

Photoshop is one of those apps that will lose more and more marketshare because being popular only mattered much when there wasn't much competition. Today, most people do not benefit from paying the premium for photoshop. Let me give you a hint: Other imaging apps also increased their ability. while users needs did not increase at the same rate. Thus, the day was coming where the premium was a wate, and now, that day is here.

RE: Buggy
By Flunk on 12/4/2008 5:36:28 PM , Rating: 3
Adobe's Elements series of apps is priced reasonably and contains the majority of features that most people use. There is always another LEGAL way.

The GIMP interface is so bad I would rather write my own photo-editing app than use it. It would be easier too.

RE: Buggy
By UNHchabo on 12/4/2008 5:52:17 PM , Rating: 2
Have you tried GIMPshop? It's GIMP, with the PS interface. I learned Photoshop back in 6.0, and now I use GIMPshop, and I can navigate the controls very easily.

RE: Buggy
By The Irish Patient on 12/5/2008 3:41:03 PM , Rating: 2
Adobe Photoshop CS4 Extended (MSRP $900) is available in both academic and student versions. What's the difference?

The academic price is $300. Probably half of the U.S. population qualifies. You can buy it if you're a student of any age between kindergarten and post-doc studies, or a parent of a student (not many kindergarten kids will be buying directly, no?), a teacher of any ilk except a music teacher, or any sort of full-time school employee (including the janitor). The qualification process for academic pricing is pretty loose.

The student price is $200. Eligibility is limited to full-time students in four year programs or graduate studies. Qualification requires bending over and spreading.

Photoshop Elements is an extremely competent program for those who don't actually earn a living as a photographer. Pricing was $50 recently at Costco.

RE: Buggy
By MPE on 12/4/2008 5:45:02 PM , Rating: 2
How you figure that?
This are professional applications that is worth its weight in gold. Many makes a living using this apps and can make decent living. You can earn more money using Adobe tools than buying a car and being a taxi driver.

Of course it is expensive if you are some poor schmuck who has entitlement issues.

Students are heavily discounted and is about the same price as some of the expensive text books.

RE: Buggy
By mindless1 on 12/7/2008 10:54:53 PM , Rating: 2
Nonsensical argument, you can make millions playing baseball with a glove you found in a dumpster. If a writer uses a bic pen does it make the pen more valuable too?

It's expensive to anyone who doesn't need it to make a living, don't be foolish and think only poor people can't understand the value of something, usually it's the ones with money who understand that the best which is why they managed to accumulate that money.

By BruceLeet on 12/4/2008 2:45:06 PM , Rating: 4
Now cut 8% of bloat please. Then you're set!

RE: Okay
By Proxes on 12/4/2008 3:31:19 PM , Rating: 1
Change that to 80% of bloat and I might install Adobe Reader on my computer.

RE: Okay
By Bubbacub on 12/4/2008 3:36:30 PM , Rating: 2
don't do it!

RE: Okay
By TomZ on 12/4/2008 5:26:34 PM , Rating: 3
Change that to 80% of bloat and I might install Adobe Reader on my computer.
I hear a lot of criticism about Reader like this, but I frankly don't get it. I use Reader all the time and it works just fine for me. It is fast and doesn't consume unnecessary resources, at least not that I've ever noticed. Why all the hate?

RE: Okay
By Solandri on 12/4/2008 6:14:06 PM , Rating: 3
Try the Foxit PDF reader and you'll see what all the complaining is about. It loads PDFs so quickly it's almost instant.

RE: Okay
By Clauzii on 12/4/2008 9:08:04 PM , Rating: 2
Hey, that was nice.

No more Adobe Reader. Works faster in the documents I make, with lots of JPGs too - nice one :D

Thank You, Solandri.

RE: Okay
By Jimbo1234 on 12/4/2008 8:04:19 PM , Rating: 2
Because it is buggy and slow. At my job it's the only program that kills the print spooler every time.

RE: Okay
By mindless1 on 12/7/2008 10:57:32 PM , Rating: 3
If you don't notice the difference, stop taking valium.

RE: Okay
By spread on 12/4/2008 9:19:01 PM , Rating: 1
Adobe Reader Lite 9.0

The lite version is faster than FoxitPDF with larger documents.

RE: Okay
By Jimbo1234 on 12/5/2008 3:06:55 PM , Rating: 3
That's really sad. When you need a "Lite" version of a reader, what is that saying?

By Inkjammer on 12/4/2008 2:50:14 PM , Rating: 5
As somebody who paid almost $2,000 for Creative Suite 3 Design Premium for my personal and business needs, I can tell you why I'm not buying the new version. I really love Adobe's software, but they've taken the Apple and EA Sports approach to their software. Every year you "need" to buy the roster update/service pack to get a small handful of new features and bug fixes. While CS4 brings some great things to the table (such as GPU acceleration) the differences between CS3 and CS4 are minor at best, yet the cost to upgrade isn't.

I have to pay for the ability to rotate my canvas in Photoshop? Art Rage, which costs $25, can do that. Painter has done that for years. And that's a big Photoshop CS4 feature. Yeah. I admit the GPU acceleration is a great feature, but I can live without it.

And then there's cost. Because I own CS3 Design Suite, I can't just upgrade Photoshop (the only app I really care about). No, I have to upgrade CS3 Design Suite in its whole because the reg key isn't compatable with CS4 Upgrade Standalone. And that upgrade cost? Over half a grand.

It's just not worth upgrading for the small handful of features Adobe offers. Granted, their software is amazing, but their version releases don't offer much incentive from the previous version. It's best compared to going from XP to Vista. Yes, there's new stuff, some of it great, but was it really a big jump? Not really.

RE: Well...
By wwwebsurfer on 12/4/2008 2:58:03 PM , Rating: 2
I tend to agree. As a user who shelled out for the Master Suite CS3, CS4 is a joke. The ONLY feature I've longed for is the background rendering in Premiere Pro CS4. But suprise, suprise - waiting 2 generations to put something in that SHOULD have made it into CS3 at the latest and I've switched the bulk of my editing load over to SpeedEDIT.

The next upgrade of Adobe software will not be until they're releasing x64 native compiles. 4GB of RAM is getting to be a joke in a video editing rig, and Adobe needs to step it up with some real features.

RE: Well...
By MatthiasF on 12/4/2008 3:07:29 PM , Rating: 2
BSA members are not the cutting edge.

They're the sander keeping the cutting edge dull.

RE: Well...
By dusteater on 12/4/2008 3:21:33 PM , Rating: 2
If they can't even make a 64-bit version of Flash Player in how many years, I don't trust their ability to get anything else right.

RE: Well...
By Solandri on 12/4/2008 4:32:56 PM , Rating: 2
I agree as well that their new versions don't give enough improvements to warrant the upgrade price.

But you don't have to upgrade every time they release a new version. Just because a new version came out doesn't mean the old version stops working. I upgrade PS every other version.

RE: Well...
By The Irish Patient on 12/5/2008 3:21:54 PM , Rating: 2
Photoshop CS4 does have both 32 and 64 bit versions included on the disk. You get to choose which one to install. If more than 4GB of RAM is installed, the program will try to use RAM for its swap file instead of the traditional swap file on a hard drive. For those with Vista64 rigs and 8+ GB of RAM, this is probably the most compelling reason to upgrade to Photoshop CS4.

Does Premiere Pro CS4 only install as 32 bit? Or is the problem that you are using Apple OSX?

CS4 for the Mac does not have any 64 bit programs because Apple will not allow 64 bit programs to use its developer friendly Carbon API. Only the native Cocoa API can be used for 64 bit. So, the Mac crowd won't get 64 bit until CS5.

Of course, the Mac faithful are raging on their blogs against Adobe and the evil Microsoft empire. It's all their fault.

Makes no sense...
By InvertMe on 12/4/2008 4:18:55 PM , Rating: 5
Am I the only one who thinks the immediate knee jerk reaction upper management has to lay people off in a recession on exacerbates the problem?

Wouldn't it be better to retain head count, reduce benefits, trim spending and force people to produce more results then if they fail be considered for termination?

Fuel to the fire.

RE: Makes no sense...
By Solandri on 12/4/2008 4:42:22 PM , Rating: 2
Dunno about other states, but I helped manage a company in California (where Adobe is located). The labor laws there are slanted wildly in favor of employees. If you're singled out for firing, it's very easy to bring up a wrongful termination suit. Even reducing benefits can be problematic. We tried for a year to get rid of an employee we strongly suspected was stealing (a couple years later during his divorce, his wife called and confirmed that he had been). Every time we consulted with our legal firm, they'd strongly advise us against it since we didn't have irrefutable proof, and prattle off a list of things he could sue us for if we let him go.

The easiest/safest way to reduce staff is to announce you're downsizing and lay off a bunch of people at once. That way there's no room for a lawsuit over why you let a specific individual go.

RE: Makes no sense...
By amanojaku on 12/5/2008 10:47:04 AM , Rating: 3
Let's break it down from a management perspective:

Wouldn't it be better to retain head count
Why, when I can fire 10 guys making $35K each and add $350K to my salary and bonus?
reduce benefits
We're hiring "consultants" at the same pay rate as "employees" to save on benefits already.
trim spending
Everyone besides the execs work in cubes with 5-year old software and 10-year old hardware.
force people to produce more results then if they fail be considered for termination?
Congress won't allow me to put a 25th hour in the day and an 8th day to the week. :-(

I'm being silly, but this is essentially what I see. The only way for companies to save these days is to reduce executive pay and benefits, and they ain't doin' that without a fight.

I won't feel bad
By fleshconsumed on 12/4/2008 4:33:53 PM , Rating: 4
Well, I won't feel bad if they decide to lay off Flash and Acrobat Reader departments.

RE: I won't feel bad
By TomZ on 12/4/2008 5:28:14 PM , Rating: 2
So you probably prefer competing solutions like Silverlight and XPS then? :o)

RE: I won't feel bad
By Etsp on 12/4/2008 9:05:26 PM , Rating: 2
Only so that the slap in the face wakes their management up, and they start developing a more efficient product,

It is happening
By Mithan on 12/4/2008 2:37:07 PM , Rating: 2
My predictions of the end of Civilization are happening.

RE: It is happening
By Pirks on 12/4/2008 2:46:17 PM , Rating: 4
Don't tell this to Sid Meier

By MrX8503 on 12/4/2008 9:50:01 PM , Rating: 2
To the people that complain about cost, they need to look at what Adobe has done to the digital art scene.

People make a living off of this software and just because you own it, this doesn't make you a professional designer.

Maybe if you actually learn how to use Photoshop, Illustrator, After effects, Premiere, and Encore in conjunction to make some dynamic animations, videos, and DVD's then maybe you wouldn't be complaining about its cost.

By mindless1 on 12/7/2008 11:03:04 PM , Rating: 2
So that's a justification for a real paint brush to cost triple what it should, since a real paint brush also helps the "art scene"? No, a tool is not more valuable because of what an artist's skills do with it.

By Clauzii on 12/8/2008 7:29:36 AM , Rating: 2
True, but a bad tool is an obstacle to the process. So I'll guess it all comes down to workflow and personal preferences.

By astralsolace on 12/4/2008 5:18:28 PM , Rating: 3
Hopefully the first team to go will be the ones who designed those annoying "UPDATE OUR GARBAGE" pop-ups. And they'll announce it via pop-up the next time they log in at work.

"This week I got an iPhone. This weekend I got four chargers so I can keep it charged everywhere I go and a land line so I can actually make phone calls." -- Facebook CEO Mark Zuckerberg
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