Adobe announces major restructuring

Predicting that its bottom line will be scalded by Japan's ongoing economic woes, Adobe Systems (Nasdaq: ADBE) is reorganizing its management, marketing and product development operations. Adobe predicts Q3 '98 revenue in the range of $220-$225 million, compared with $230 million in Q3 '97. Earnings approaching break-even or even a loss are expected, compared with net income of $53.4 million for the year-ago quarter. Official results will be announced on September 24.

In response to the negative earnings news, Adobe is shuffling management and eliminating positions in order to align marketing functions and product development. The immediate result is a $50-$60 million annualized reduction in expenses and a workforce reduction of 240-300 employees, which roughly translates into an 8-10% cost reduction. Among the casualties are P. Jackson Bell, executive VP and chief administrative officer; Robert Roblin, executive VP or marketing; and Ross Bott, executive VP of Adobe's product divisions. Bruce Chizen, previously senior VP and GM of Adobe's graphics products division, will now oversee all engineering and marketing operations as Adobe's new executive VP of worldwide products and marketing.

Adobe has also named a new eight-person management team: John Warnock, CEO; Charles Geschke, president; Fred Snow, executive VP of worldwide field operations; Chizen, Harold Covert, senior VP and CFO; Colleen Pouliot, senior VP, general counsel and secretary; Jim Stephens, VP of investor relations; and Rebecca Guerra, VP of human resources. Everyone but Geschke reports to Warnock. The new management team will "focus on delivering solutions across a broader set of customer segments...by closely aligning marketing, sales and product development," according to Warnock.