Adobe Systems to cut 600 jobs, or eight per cent of workers

Adobe Systems Inc. released better-than-expected preliminary earnings for the fourth quarter late Wednesday, but said it will cut 600 jobs, or eight per cent of its work force, because of slower revenue growth.

The company said it expects earnings of 45 cents to 46 cents per share, compared with 49 cents per share in the year-earlier period. Excluding certain items, Adobe said it expects to earn 59 cents to 60 cents per share. Analysts, who typically exclude one-time charges or gains, projected 51 cents, according to Thomson Reuters.

Adobe said revenue should come in between US$912 million and $915 million, up from $911 million a year earlier, but below the average Street estimate of $930 million.
"The global economic crisis significantly impacted our revenue during the fourth quarter," Adobe chief executive Shantanu Narayen said in a statement.

The company said it will cut 600 jobs across all locations and business units. The layoffs will cost between $44 million and $50 million in charges, Adobe said.

The company's shares gained 54 cents, or 2.5 per cent, to $22.54 in the regular session, but fell $1.56, or 6.9 per cent, to $20.98 in after-hours trading following the release of the outlook.