Layoffs Pending After Macromedia Deal

Adobe Systems Inc. said Monday it will reduce part of its workforce in light of its acquisition of Macromedia Inc., saying other employees may be offered relocation packages.

Layoffs will occur in jobs where there is duplication, said Pierre Van Beneden, vice president for Europe, the Middle East and Africa (EMEA) for Adobe. Other workers in Europe, for example, some in the U.K., may be offered jobs in Nordic regions or Eastern Europe to bolster product offerings there, he said.

Adobe may also hire new talent within Europe, he said. The cuts will be formally announced on Dec. 15 during the company’s fourth quarter fiscal earnings. As of March 2005, Macromedia had 1,445 employees worldwide, with 1,151 of those workers in the U.S.

“When you speak about reductions in force, I want to say that we share the pain between the two companies, Adobe and Macromedia,” Beneden said in an interview with IDG News Service.

Adobe completed its US$3.4 billion acquisition of Macromedia on Saturday, a deal first announced in April. Macromedia investors will receive 1.38 shares of Adobe common stock for each of their shares, the company said.

Bruce Chizen, chief executive officer (CEO) of Adobe, and Shantanu Narayen, president and CEO, will remain at the helm of Adobe. Stephen Elop , former president and chief executive officer, will become Adobe’s president of worldwide field operations.

With the acquisition, Adobe adds Macromedia’s popular Flash products used to view animation and video. Adobe’s own portfolio includes the widely-used portable document format (PDF) and the company’s Acrobat reader.

Adobe, which is based in San Jose, California, said it will begin integrating the two companies operations, networks and customer care organizations this week. Macromedia was in San Francisco.

Adobe will go from 30 to about 70 products, and employees will undergo internal training, Beneden said. Macromedia’s logo will no longer appear on products, he said.

By Jeremy Kirk – IDG News Service (London Bureau)