Adobe Systems expects to cut 680 full-time employees, or about 9 percent of its global workforce, as the company tries to align costs in the face of lagging sales.
The layoff, which was disclosed Tuesday in a regulatory filing with the U.S. Securities and Exchange Commission, marks the second wave of job cuts in the past year. In December, the company said it would slash 600 jobs amid less-than-anticipated demand for its recently launched Creative Suite 4 series of products.
The cuts will affect only those workers who were Adobe employees before the $1.8 billion acquisition of Web analytics firm Omniture in September. They are separate from an earlier-announced 9 percent workforce reduction within the Omniture unit, which had about 1,200 employees at the time of the acquisition.
Adobe, which is best known for its Photoshop and Illustrator software titles, said it expects to record about $65 million to $71 million in pretax restructuring charges.
"Adobe is restructuring its business to align costs with its fiscal 2010 operating plan and budget, the company's three-year strategic priorities, and the realities of the business environment, as well as to ensure its ability to continue investing in long-term growth opportunities," Adobe said in a statement.
In September, Adobe reported that its fiscal third-quarter profit fell 29 percent amid declining sales.
Adobe Systems announced lower second-quarter earnings and sales on Tuesday.
Income dropped 41 percent to $126.1 million, or 24 cents per share, from $214.9 million, or 40 cents per share, a year ago. Sales fell 21 percent to $704.7 million from $886.9 million in 2008's second quarter.
Results were actually in line with or slightly above estimates. Analysts surveyed by Thomson Reuters expected even lower sales of $694.8 million. Excluding the cost of special items, second-quarter earnings hit 35 cents a share, meeting analysts' expectations.
Adobe CEO Shantanu Narayen was upbeat about the quarterly performance.
"We are pleased with the solid profit margin and earnings results we were able to deliver in Q2," said Narayen. "We continue to invest in our key business initiatives which will drive long-term revenue growth once the economy improves."
For the third quarter, Adobe is forecasting sales of $665 million to $715 million with earnings of 20 cents to 27 cents per share, or 30 cents to 37 cents a share excluding special items.
Adobe typically counts on strong revenue from its Creative Suite line of products. But sales of the newest CS4 edition have been weak. The product was released late last year just as the recession was kicking into high gear.
Adobe has been moving to improve performance by cutting costs and introducing new products. In December the company said it would trim about 600 jobs. This week Adobe announced it's bringing its new business-class Acrobat.com PDF conversion site out of beta.
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Updated Friday at 11:16 a.m., with Microsoft comment on Silverlight adoption rate.
Adobe Integrated Runtime and Flash Player 10 have latched onto a tailwind, capturing record adoption rates within a year after their release, Adobe Systems said Thursday.
AIR, software designed for running Web applications on PCs, has received more than 100 million installations, the company said. That figure comes at a time when Adobe is facing new competitors in the market. One such rival said he believes the growing popularity of open-source software will steal AIR's thunder.
Adobe's Flash Player 10, meanwhile, has been installed on more than 55 percent of computers worldwide within the first two months of its release. And Adobe is forecasting that figure to rise even higher, to 80 percent by the second quarter.
That, in part, comes as no surprise, given that Adobe's Flash is already installed on the vast majority of PCs running Windows. Flash Player 10 was the company's major update to improve the way its audio, video, and graphics run on systems.
For Adobe, such results on its Flash Player 10 installation, nonetheless, bode well for the company, considering that Flash Player 10 launched within days after Microsoft debuted its rival Silverlight 2.0 software.
Microsoft's Silverlight 2.0 has been installed on more than 100 million PCs since its launch in October of 2008, according to a Microsoft representative.
"Currently, one in four consumers worldwide have access to a computer with Silverlight technology already installed. We expect to have more users around the world--hundreds of millions more, in fact--consuming and experiencing Silverlight-based content and applications in their homes and enterprises over the coming months and years," the Microsoft representative noted in an e-mail interview.
Shares of Adobe Systems fell 7 percent Tuesday after a market analyst downgraded the company's stock from "market perform" to "underperform."
Share closed at $22.10, down $1.66, after FBR Research analyst David Hilal said in a research note that he cut his rating on Adobe's stock because the "shares have risen to a point where the risk-reward profile is unfavorable." Hilal also said Adobe depends too much on new unit sales and lacks recurring revenue from existing customers.
In other news, Adobe announced that former Yahoo executive Dan Rosensweig had joined the company's board of directors. Rosensweig, who served as Yahoo's chief operating officer for nearly five years before departing in 2006, was previously president of CNET Networks, publisher of CNET News..
Adobe also announced that board members Colleen Pouliot and Delbert Yocam would retire, effective March 31. Pouliot has served on the board since 2001, and Yocam has served for 18 years, Adobe said.
Starting to answer the clamorous demand from open-source fans, Adobe Systems plans to release an alpha version of its Flash Player technology on Monday for those using 64-bit Linux software.
Linux has moved more rapidly than Windows or Mac OS X to support 64-bit processors, in part because the developer-friendly compile-your-own-software ethos that prevails makes it easier for the technically savvy to make the switch. But one of the obstacles in the switch is that people could only use the 32-bit Flash plug-in, which meant that they only could use the 32-bit version of Firefox.
The company plans to release the software at its Adobe Max conference in San Francisco.
The 64-bit support will arrive on other operating systems later, Adobe said, but Linux fans get it first because they were the most vocal in their desire for it.
"Release of this alpha version of 64-bit Flash Player on Linux is the first step in delivering on Adobe's plans to make Flash Player native 64-bit across platforms," Adobe said in a statement. "We chose Linux as our initial platform in response to numerous requests in our public Flash Player bug and issue management system and the fact that Linux distributions do not ship with a 32-bit browser or a comprehensive 32-bit emulation layer by default. With this prelease, Flash Player 10 is now a full native participant on 64-bit Linux distributions. We are committed to bringing native 64-bit Flash Player to Windows and Mac in future releases. We expect to provide native support for 64-bit platforms in an upcoming major release of Flash Player. Windows, Macintosh and Linux players are expected to ship simultaneously moving forward."
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Google wants to help you put a name to that face.
With a face recognition feature set to launch at noon PDT Tuesday, Google's Picasa Web Albums will help users label their photos with the names of subjects. That and other changes to the photo-sharing site are joined by a new beta version of the accompanying Picasa 3.0 photo-editing software.
The "name tag" feature presents users with collections of photos with what it judges to be the same person, then lets them click a button to affix a name. Once photographic subjects are named, users can browse an album of that individual on the fly.
The Picasa Web Albums name tag feature groups like faces together to let users tag them with names a batch at a time (click to enlarge).
(Credit: Google)"Once you've started naming people, we'll start suggesting names for you based on similarity," said Mike Horowitz, Google's Picasa product manager. "The process of naming people is really addictive and tremendously fun."
Having tried the new service on dozens of photos, I wouldn't go that far. But it is a major advance in what I believe is a very important area, photo metadata.
Tagging is a powerful way to sort digital photographs. Photo albums are useful, but with rich tagging, people also can slice and dice their photo collection to show particular people, activities, or locations. Even with face recognition technology or other computer processing, the textual tags in photos are a far more reliable way for computers to understand image content.
And tags become even more powerful as photos are assembled into publicly accessible collections such as those at Yahoo's Flickr, Picasa, or Fox Interactive's Photobucket.
Eat your vegetables, exercise regularly, tag your photos
The problem with tagging is that it's a chore, so most people don't bother. But Picasa's name tag feature automates the process enough--and provides enough reason to use it--that I believe many users will take the tagging plunge.
It took me less than 15 minutes to tag close to 200 faces in a set of more than 100 photos, and that included some start-up time such as figuring out how the system worked, establishing names for various common subjects, and correcting a few errors. The most impressive moments are when Picasa presents a large array of photos with the same face, and you can label them all with a single click.
Picasa editing software now lets users export movies with musical soundtrack to a file or YouTube (click to enlarge).
(Credit: Google)I speak here from experience. I do tag my own photos--for example the 700 I took on a weeklong backpacking trip earlier this month--and something like Google's facial recognition assisting would have dramatically sped the process. It wouldn't help with other tags such as "swimming," "waterfall," or "Sierra tiger lily," but let's face it--people are the central feature in most people's photos.
Overall, Google's Picasa moves show that despite a long period of near-dormancy, Google still evidently is committed to the photography site and software.
However, Picasa overall still feels like a staid place to store photos, share them with friends, and maybe order prints. It doesn't match the vibrant community of Yahoo's Flickr. And though Flickr also has been slow to change, Yahoo has at least been nudging it in the right direction with additions such as online editing.
Picasa Web Albums' most conspicuously erroneous identification of a face, actually the spokes on my bicycle's front wheel.
(Credit: Stephen Shankland/CNET News)
Face recognition blemishes
Picasa's name tags are helpful but imperfect. The feature failed to find faces in several photos where I thought the faces were reasonably obvious. It also thought my bicycle wheel's spokes and wife's ear were faces. One excusable error: it thought a mask in a mural was a face, though for some reason it didn't bother with a couple of real humans in the same mural.
"Our face-matching technology works best when a person is looking at the camera," Horowitz said. "There are a variety of factors that may limit our success in matching faces, including profile views and challenging lighting conditions like shadows."
The most annoying error was that during the initial period when I was adding names to the system, it somehow came up with three separate versions of me and two versions of my son, despite the fact that I entered the same name and e-mail address. I fixed it by telling Picasa my alter egos were erroneously labeled, at which point they re-entered the labeling pool and I assigned them to the remaining identity. Too bad I didn't notice the "merge" option until later.
Picasa Web Albums asked me to identify this face it found--actually a mask in a mural (click to enlarge).
(Credit: Stephen Shankland/CNET News)Knowing the privacy implications of face recognition, Google is proceeding somewhat cautiously. Picasa users must specifically enable the name tag feature, and default name tags aren't shared publicly. Picasa users may only tag photos in their own account.
With the "name tag" feature, which users must specifically enable, Picasa presents groups of images sharing the same face. Users can label them with a person's name. Eventually users can click a tag to find shots of a particular subject in their photo collections,
The face recognition technology came to Google via its 2006 acquisition of Neven Vision, Horowitz said.
There are other changes coming to Picasa Web Albums (though a change to Google Photos isn't one of them, at least right now). One is an "explore" view that lets people browse the total collection of public Picasa photos. It lets people browse by popular tags, location, and peer at recent uploads. Another is the ability to e-mail photos to the service.
Picasa 3 beta
Google also plans to release a beta version of the Picasa 3 image-editing. It works on Windows, though a Google Labs version has been transmogrified to work on Linux via the Wine software layer. Horowitz wouldn't confirm whether a Mac OS X version is anything more than an idea: "Macs are important to us," he said. "We're always looking for new ways making sure our users are happy, so it's something we're looking at."
The new Picasa software brings several changes:
• A movie maker mode lets people combine photos with music to export movie versions of galleries to watch on a PC or upload to YouTube.
• A new retouch brush lets people edit out skin blemishes and other trouble spots. And the tool can automatically fix red-eye problems caused by flash photography.
A collage mode in Picasa lets users create poster-size collections, sizing and placing each snapshot. (Click to enlarge.)
(Credit: Google)• A new collage mode lets users compile many photos into one composite image. This time, users get precise control over image placement for example by moving, rotating, and resizing photos, and the software can produce a high-resolution composite for poster-size prints.
• A photo viewer for quick slideshows, an option that during installation politely asks to own the file associations for JPEG, TIFF, raw images from higher-end cameras, and some other formats. The slideshow software can view PNG files, which is handy, but the editing software still can't, which is a significant limitation for me.
• Online synchronization. If photos have been uploaded from Picasa to the Web site, they can be edited later and the changes, including tags, are synchronized to the Web site. This is very handy since you might want to get images up quickly to share with friends then edit them later. Unfortunately, changes on the Web site aren't mirrored back to the PC, so all those name tags will stay put in the cloud for now.
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