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Adobe plays down local impact of cost reduction program

Adobe plays down local impact of cost reduction program

Adobe's local chief has played down the impact of a global cost reduction program - which includes the elimination of 300 positions - on the company's Australian and New Zealand operations.

Mark Pieper, Adobe's general manager, Australia and New Zealand, said the program - designed to save around $US50 million to $US60 million a year - was not expected to directly affect the local marketplace, while the final impact on the Asia-Pacific office, also based in Sydney, was still to be determined.

Pieper said the program was designed to re-orient the company towards customer service, and changes to the corporate head office and operational divisions would reflect this.

The graphics and printer software specialist expects to approach break even or record a loss on net income for the quarter ending August 28, compared to net income of $US53.4 million for the same quarter last year. The third quarter of 1997 included gains of $US12.9 million from the sale of securities.

Adobe's executives have blamed the loss primarily on weak sales in Japan and shipment delays involving a key product. Details of that product - now due for release in the fourth quarter - were unavailable from Adobe executives.

"These expected results are unacceptable," John Warnock, chairman and chief executive officer of Adobe, said.

Adobe said it eliminated three executive positions with the managers involved resigning from the company. Specifically, Adobe scrapped the positions of executive vice president and chief administrative officer; executive vice president for marketing; and executive vice president for product divisions. They had been held by Jackson Bell, Robert Roblin and Ross Bott, respectively.

Warnock and Charles Geschke, chairman and president, will continue to partner in co-chairing the company. But Warnock will resign from his three public board positions over the next three months in order to better concentrate on day-to-day operations of Adobe. Warnock sits on the board of directors of Evans & Sutherland Computer, Netscape Communications, and Octavo, according to Adobe's Web site.


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