Adobe 1999 Annual Report Download - page 63

Download and view the complete annual report

Please find page 63 of the 1999 Adobe annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 90

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90

ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
(Continued)
NOTE 7. RESTRUCTURING AND OTHER CHARGES (Continued)
Severance and related charges include involuntary termination and COBRA benefits, outplacement
costs, and payroll taxes for 198 employees, or 7% of the worldwide workforce. The terminations were in
the following areas: 42 in research and development, 107 in sales and marketing, and 49 in general and
administrative.
The reduction in force within research and development consisted of employees in the Company’s
Printing Solutions business in San Jose, California and was implemented in order to realign product
development expense
62
s with the Company’s operating targets. The majority of these terminations were
completed by August 31, 1999, and the remaining termination benefits will be paid through the first
quarter of fiscal 2000.
The phasing out of the European headquarters in Edinburgh, Scotland was implemented to reduce
redundancies within the organization and resulted in a reduction in force of 48 general and administrative
staff and 43 sales and marketing staff. The closure of the European headquarters was completed by
December 31, 1999, and all termination benefits will be paid through the first quarter of fiscal 2000.
The remaining terminations in the sales and marketing organization were primarily due to the
centralization of the North American sales and marketing organization. The remaining general and
administrative reductions were due to the elimination of redundancies throughout the organization. The
majority of these terminations were completed by June 30, 1999, and the termination benefits will be paid
through the first quarter of fiscal 2000.
Lease termination costs of $0.4 million include remaining lease liabilities, brokerage fees, restoration
charges, and legal fees offset by estimated sublease income related to facilities in the United States,
Australia, Scotland, and Japan that will be vacated as part of the restructuring program. The facilities will
be vacated as a result of the elimination of staff and organizational decisions associated with the
centralization of certain activities in San Jose, California. The remaining accrual balance as of December 3,
1999 is expected to be paid through the second quarter of fiscal 2000.
Charges related to the impairment of leasehold improvements at vacated facilities of $0.1 million
included the write-down of the net book value of leasehold improvements, furniture, and equipment used
in the vacated facilities. These assets were written down in accordance with the provisions of SFAS 121.
Other charges of $0.3 million included legal and accounting fees incurred in Edinburgh and North
America associated with employee terminations as part of the reduction in force. The remaining accrual
balance as of December 3, 1999 is expected to be paid by the second quarter of fiscal 2000.