Mac software maker Adobe Wednesday announced it will eliminate 600 jobs as the company blames weak consumer demand and the U.S. recession for less-than-expected fourth quarter revenue.
The San Jose, Calif.-based firm projected it would earn between $912 million to $915 million for the quarter ended Nov. 28, far below the $930 million Wall Street expected. Adobe had earlier estimated revenue between $925 million to $955 million.
Weaker than expected demand for Adobe’s Creative Suite 4, released in October, was given as one reason for the shortfall.
“The global economic crisis significantly impacted our revenue during the fourth quarter,” Shantanu Narayen, Adobe president and CEO, said in a statement.
Adobe may have mined its Creative Suite dynasty to the point of consumers not seeing any benefit to upgrading, Gartner analyst Hai Hong Huang told Cult of Mac. CS3, when it launched in 2007, saw a 26 percent jump in users drawn to multiple new features introduced.
On Tuesday, Adobe announced it planned to curtail its presence at San Francisco’s Macworld 2009, scheduled for Jan. 5, 2009. The company said it had “decided to shift its focus” at the trade show away from exhibiting its products to purely educational. CS4 was expected to be one of Adobe’s new products displayed at the Macworld event.
18 responses to “Adobe Cuts 600 Jobs As CS4 Finds Weak Demand”
Maybe Adobe should rethink the pricing on CS4. For designers like me, it’s simply not possible to drop $800-2000+ every time they release a new version. Designers tend to get very comfortable with their tools, regardless of whether or not those tools have all the current bells and whistles. If Adobe would take on a more realistic pricing model (like, say, Apple has done with iWork, iLife, etc.) I guarantee software would fly off the shelves. I’d gladly pay $200 for the CS4 update, but I don’t need an update enough to pay $800, especially in the current market.
Agree with the thelottery’s rethinking the pricing scheme and lack of compelling “gotta have” features for CS4. Adobe has a wonderful product generation capability but unfortunately a combination of the economy, not a great gap in features from CS3 to C$4 and the cost of the upgrade has caused the slippage in sales. $200 for an upgrade seems more reasonable to me too.
As a designer in Europe (Adobe pricing here is even more ridiculous) I couldn’t agree more with thelottery and windest.
Another me too post, Adobe simply outpriced themselves. No-one I know has updated to CS4 (the quest for more money), the feature set doesn’t balance against the money. In fact for some time Adobe have been living in a dream land with their pricing structure. Don’t get me wrong, Adobe products are at the top of their game, but each time they raise their prices by $300 they lose honest paying customers. If they halved their prices, most people I know would upgrade, until then they continue to consider the alternatives.
I got adobe Photoshop for $89! Contact me at new_saturn03@yahoo.com
I’d buy it tomorrow if it wasn’t so fundamentally broken! Adobe need to stop adding features and make a stable suite of apps. Oh and stop taking functionality away, in the resent years what they have given with one hand(normally rubbish) they have taken away with the other (something useful). I know of one person to update and it has been removed because it’s very unstable. Plus the fact why would mac users update when adobe have stated that the next version will add 64bit and this is what most of us want, more RAM.
I’m still using CS, from 2003! Works great. I’ve contemplated upgrading to each new version however the cost just doesn’t justify doing so.
We here agree that if Adobe would be more realistic in their pricing upgrading would be an option. But at some point they need to look at the law of diminishing returns.
Are you listening Adobe? Let me get this right. You want me to upgrade a year-old package for about 30-50% the original purchase price? Is it any wonder that CS4 updates aren’t flying off the shelves.
I love Adobe products and use them almost daily (the Vista installation is a disaster, but that’s another story). I guess I’ll wait until they’re on deep discount special at Costco or Tiger Direct.
I wish Adobe well, they are brilliant.I do agree CS4 doesnt have much in it for me.
Getting Adobe to listen is pretty hard these days.Too big, they have lost touch with the everyday graphic designer.I reckon they should look to bring out packages directed to certain people.
Like Photoshop for Photographers so the stuff in CS4 is just for Photographers let them pay for it $180 and have an upgrade for designers etc @ $100.
It is as we all agree a rip off.