Autodesk just announced that it will reduce its workforce by 1,150, or around 13%.
The bomb was dropped in the company’s quarterly financial call, when we also found out it had lost $120 million.
While not specific about what divisions, programs or locations will suffer, new CEO Andrew Anagnost announced the restructuring from “a position of strength,” defending upcoming strategic cuts against “peanut butter cuts,” which are cuts applied evenly across the whole company.
The restructuring plan is expected to cost anywhere from $135 to $145 million in the next quarter. How much of that will be severance pay is not known.
The last big layoff at Autodesk was in February of 2016 when the company, under Carl Bass, announced a 10% workforce reduction and let go 925 people.
Sales people will be affected, an expected result of more online sales. Term licensing and automatic renewals, more common in software sales and now in CAD, lessen the need for human intervention.
Autodesk’s army of resellers will also be feeling a pinch. This should be no surprise, says Andrew. Our resellers have been told there to expect change. Everyone knows we are going for a 50-50 mix. [50% direct sales, 50% reseller sales.]
The $120 million loss in the last 3 months makes 10 straight quarters in the red. Financial analysts have been forgiving of Autodesk, even optimistic, cutting the company a lot of slack, figuring it will one day catch up to the big pot of deferred revenue created in the shift from perpetual to term licensing. But is their patience running out? In today's Q&A, one analyst finally asked when the company expects finally expects to be coming back to profitability.
“We see FY 2018 as the trough,” was the response.
Autodesk is predicting a rise from the trough the following year. They didn’t mention Adobe this time, but the need to be like Adobe is obvious. Adobe dropped perpetual for term licensing and it took 11 quarters before revenue caught up. However, unlike Autodesk, Adobe managed to stay profitable every quarter.
Autodesk took a 12% plunge immediately after the announcement.
Revenue was $515 million, an increase of 5% over the same period last year.
While revenue was flat in the US and the rest of the Western Hemisphere, but Asia Pacific (APAC) region increased by 8%. Another increase like that will put APAC in the lead, passing the Americas.
Everyone have a great day, concluded the moderator.