SAN FRANCISCO (Reuters) - Adobe Systems Inc (ADBE.O) on Wednesday lowered is revenue outlook and said it will eliminate 600 jobs, or around 8 percent of its workforce, due to the weak economy, sending its stock down 7 percent in extended trading.
“The global economic crisis significantly impacted our revenue during the fourth quarter,” said Shantanu Narayen, the company’s chief executive, in a statement. “We have taken action to reduce our operating costs and fine-tune the focus of our resources on key strategic priorities.”
Adobe spokeswoman Jodi Sorensen said it would be an across-the-board headcount reduction, impacting all geographic regions and company divisions.
The maker of Acrobat Reader, Flash and Photoshop software took its revenue outlook for the fiscal fourth-quarter ended November 28 to a range of $912 million to $915 million from its earlier view of $925 million to $955 million.
The company also said it expects fourth-quarter adjusted earnings in a range of 59 cents to 60 cents a share, higher than its previous forecast, as it benefited from two favorable tax items.
For the February quarter, Adobe forecast revenue of $800 million to $850 million, well below analysts’ forecast range of $846 million to $1.02 billion, according to Reuters Estimates.
Adobe cited weaker-than-expected demand for its new Creative Suite 4 family of products, which began shipping in the quarter, as the main cause of the revenue shortfall.
CS4 is a package of tools for graphical designers that includes Photoshop photo-editing software, 3-D computer drawing program Illustrator, Dreamweaver for designing websites and Soundbooth for audio-editing.
In a conference call in September, Narayen told investors that CS4 would be Adobe’s biggest product introduction ever.
The company will record $44 million to $50 million in charges related to the headcount reduction, with $28 million to $30 million of the total coming in the fourth-quarter.
Shares of the San Jose, Calif.-based company closed the regular session up 54 cents, or 2.5 percent, at $22.54 and fell to $20.55 in extended trading.
Reporting by Gabriel Madway; editing by Gunna Dickson