A hundred Adobe sales team members have been let go amid challenging macroeconomic conditions worldwide. According to a statement, Adobe “shifted a few employees to positions that promote critical initiatives,” and “a small number” of other jobs were cut. Adobe said it was not making company-wide cuts and was still hiring for critical positions.
Adobe’s personnel cut is smaller than that of Big Tech. But the move is a sign that the global financial crisis is now having a more profound impact on the companies.
At the ‘Adobe Max 2022 conference in the U.S. in October, CEO Shantanu Narayen pointed out that the software giant would increase employees by a smaller percentage than it has in recent years. Let us view the Adobe layoffs in detail in this article.
Overview of Adobe
The American software company Adobe is formally known as Adobe Systems. It is well known for its multimedia and creative software offerings. Acrobat Reader, Photoshop, and Creative Cloud are all well-known products. The business was started by John Warnock and Charles Geschke in 1982. Its main office is in San Jose, California. The name is derived from Adobe Creek in California, which is located behind the founders’ homes.
In the 1980s, when the business entered the consumer software industry, digital fonts were among its first products. The business’s first consumer product, a Mac vector-based drawing tool called Adobe Illustrator, was released.
In 1989, Adobe released Photoshop, its most popular product with its Adobe Acrobat and Reader software. The business built on this software’s success. Today, PDF is a recognized international standard.
A massive data leak rocked Adobe in 2013. The business confirmed that 38 million active users—far more than the 2.9 million first stated—had been impaired. The attackers had gained access to their I.D.s and encrypted passwords. Additionally, the hackers were able to steal a part of Photoshop’s source code.
Then, in 2019, Adobe servers were again breached, exposing private data belonging to 7.5 million clients. This includes email addresses and membership status. Although no passwords or financial information were stolen, there was a significant chance of falling victim to phishing attacks.
Based on the subscription, Adobe Creative Cloud is a software-as-a-service (SaaS) package that provides access to various creative tools. The business also entered the digital marketing software sector. In 2021, it was regarded as one of the world’s top CXM leaders.
More than 26,000 people work for Adobe globally as of 2022. Additionally, Adobe has sizable development facilities in the U.S. in Newton, New York City, Arden Hills, Lehi, Seattle, Austin, and San Francisco. Additionally, it maintains large development operations in India’s Noida and Bangalore.
Adobe fires sales team in layoffs
Adobe is the target of the most recent round of tech layoffs. In a cost-cutting move, Adobe is said to have eliminated roughly 100 workers in December 2022. Meanwhile, the industry still deals with Amazon, Twitter, and Meta layoffs.
According to a Bloomberg report, employees on the sales team have been the most affected by Adobe layoffs. Some fired employees had the chance to find other jobs at the software company despite many releases at other tech behemoths.
Adobe’s job reductions are considerably less than the thousands reported by other major companies. The report includes Amazon.com Inc., H.P. Inc., Cisco Systems Inc., and Meta Platforms Inc.
Major tech firms have been setting the pace when it comes to mass layoffs. For instance, Meta stated in December 2022 that it would cut around 10,000 jobs and stop hiring for 5,000 unfilled positions. It revealed this after laying off nearly 11,000 workers in November 2022.
At the end of the company’s third fiscal quarter on September 2, documents show that it employed more than 28,700 people.
According to the report, Adobe declared that the company had moved some employees into jobs supporting essential initiatives. It only eliminated a tiny number of other jobs as well. Additionally, it stated that Adobe is currently hiring for crucial positions. Thus, it is not engaging in company-wide layoffs.
Adobe’s layoffs occurred when it was preparing to increase the number of “casual consumers and small companies” in its user base. As the world economy struggles with an economic crisis, the design behemoth joins the list of businesses that have cut employees to save expenses.
With $4.43 billion in revenue, which marks a 15% year-over-year increase, Adobe experienced a record third quarter in 2022. Shantanu Narayen, CEO of Adobe, stated,
“In this digital world, Adobe Creative Cloud, Document Cloud, and Experience Cloud have grown even more mission-critical to an expanding wide range of clients.”
Shares of Adobe rose after the software maker guided for the upcoming fiscal year that fell short of forecasts. It attributed some loss to a stronger dollar and alarming foreign exchange rates.
According to the CEO, Adobe’s ongoing performance in this uncertain macroeconomic environment “reaffirms that our products are mission-critical to a rising universe of customers.”
Adobe’s CPO promises that there won’t be any layoffs in 2023
Adobe is now focused on growth after firing roughly 100 sales staff members in December 2022. In an interview, Gloria Chen, Adobe’s CPO, stated that there won’t be any significant layoffs in 2023. He also said that hiring will continue for many key positions.
The business just opened its fourth location in San Jose, California. The company was getting ready to release its first quarter results report. There will be space for 3,000 individuals in this office.
It reported $4.53 trillion in sales for the fourth quarter of 2022, a rise of 10% from the previous quarter. Adobe generated $17.61 billion in sales in F.Y. 2022, a growth rate of 12% year over year.
How is Adobe’s CFO preventing massive layoffs?
Dan Durn, CFO and EVP of finance, technology services, and operations at Adobe, told an interviewer not to be diverted by the short-term noise. In times of rapid change, such as “the pandemic, economic cycles moving up and down,” and even the failure of Silicon Valley Bank, Durn advises his peers to follow that advice.
Adobe reported $4.66 billion in revenue in the March 3, 2023 quarter. Above expectations, it is up 9% yearly, or 13% in constant currency. On March 15, the earnings report was made public. At March 22’s market close, ADBE shares had increased by nearly 13% over the previous five days to $374.22. According to Durn, the company’s technologies, like Creative Cloud, Document Cloud, and Experience Cloud, help customers keep up with the latest digitalization trends.
“We’re not planning to do company-wide cuts at Adobe,” said Durn in response to the December layoffs. “We don’t have to do that, and we do not wish for our workers to be worried about when the next shoe will drop,” he added.
Adobe avoided major layoffs in what way?
According to Durn, during the pandemic, a shift to work from home and hybrid environments resulted in a “robust demand” for technological solutions and digital skills. However, he adds, “We didn’t go beyond by hiring a huge number of individuals. Adobe therefore has no more talent than it eventually needs in this “proper demand environment,” according to him.
As a result, Adobe is well-positioned to “carry out against the things we see in the industry to continue to catalyze this pivot to all things digital,” according to Durn.
Adobe Firefly is a new family of innovative generative A.I. models. It initially focused on the generation of visuals and text effects. The firm unveiled it on March 21, 2023. Users will be able to create content using their own words. It can be done using everything from 3D, music, graphics, and movies to creative features like color gradients.
The new Adobe Sensei generative A.I. services across Adobe’s clouds will include Adobe Firefly. According to Durn, “Generative AI improves, not replaces, human creativity, especially in the artistic world.”
For over $20 billion, the business signed a binding merger deal in September to buy Figma. It is a web-based collaborative design platform and a rival to Adobe. The Justice Department was reportedly putting together an antitrust complaint. According to a report, this was to stop the transaction in February 2023.
According to Durn, customers have expressed satisfaction with the mix of Adobe tools for content creation and Figma applications that permit real-time sharing on the same file.
In December, Adobe turned 40. “We have been playing a role in driving the trends toward digitization. So we are not just profiting from them now “, adds Durn. He claims that doing so requires exceptional talent. The kinds of people we draw to this business are among the most imaginative globally, claims Durn. A creative spirit that will change with the times.
A cost-cutting effort motivated the job losses at Adobe in December of last year. However, in contrast to the thousands of employees who lost their employment across the tech sector globally, only a hundred or so people were affected. At the time, Adobe had also given affected individuals the chance to pursue other jobs at the software giant.
Adobe disclosed its plan to buy Figma, a web-first collaborative design platform. The deal is for nearly $20 billion in cash and stock. Adobe announced it only two months before last year’s
Layoffs. The acquisition of Figma was made to assist Adobe in reaching out to small businesses. Since its significant products are geared toward professionals and creators,