Adobe Drops 9%: Sets Restructuring, Laying Off 750

14 Nov

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As reported in the Tech Trader Daily, shares of Adobe (ADBE) are down $2.81, or 9%, at $27.61 after the company said it will restructure its business, including cutting 750 full-time jobs, mostly in North America and Europe.

Adobe plans to focus on and invest “aggressively” in “digital media” and “digital marketing,” it said. It will invest less in development of products for enterprise customers, the company said. That will reduce 2012 revenue growth by 4 to 5 percentage points, the company said, for total revenue growth of 4% to 6%.

Adobe expects revenue growth to return to double digits after 2012, it said.

Adobe also reaffirmed a Q4 outlook for $1.075 billion to $1.125 billion in revenue, but cut its EPS estimate to a range of 30 cents to 38 cents per share, down from a prior range of 41 cents to50 cents per share.

An Adobe press release went on to state: “In order to better align resources around Digital Media and Digital Marketing, Adobe is restructuring its business. This will result in the elimination of approximately 750 full-time positions primarily in North America and Europe. We expect to record in the aggregate approximately $87 million to $94 million in pre-tax restructuring charges”.

“We believe that by focusing resources on two large initiatives and shifting our business model, we can drive faster and more predictable growth in FY2013 and beyond,” said Mark Garrett, Adobe executive vice president and CFO.

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