14 DAY TRIAL // Software giant Adobe has shut down all US operations this week as a cost cutting measure. Employees were asked to take paid vacation time and stay at home for the week. The measure comes as revenue dropped considerably in Q2 2009 following a similarly bleak first quarter.
The company has been struggling with declining sales in the weak economy and has introduced the week off as part of a greater effort to keep costs low. There has already been another week-long shutdown in April and the plan is to have one in every quarter with at least one more week of staying at home coming later this year. The paid vacation time comes in addition to the regular one week off during Christmas and New Year's Day.
“Let me first mention that these Adobe shutdowns are nothing new. I've worked here for 9 years, and the company has done the shutdowns off and on throughout that time – at least since '01 or '02,” John Nack, principal product manager, Adobe Photoshop, writes, reassuring that this is business as usual for the company.
Adobe posted very weak results for the second quarter, though in line with expectations, with earnings dropping 41 percent from last year from $214.9 million to $126.1 million. Sales were also down, from $886.9 million in the second quarter last year to $704.7 million in 2009. One of the major reasons for the poorer sales is the 20 percent drop in Adobe's latest Creative Suite, which accounts for 60 percent of the company's revenue.
Chief Financial Officer Mark Garrett announced a number of cost-cutting measures that involved lowering spending on marketing and cutting travel expenses and bonuses. The company also laid off 600 employees in December but has since hired 260 in areas with lower wages and costs.