JustinFlood.com

Adobe fires 600, People stop paying $700 for Photoshop (duh.).

Adobe, makers of almost all of the popular graphics and layout software in use today has announced the layoffs of nearly 600 of it’s workers due to the troubled economic times.  According to an article from ZDNet:

Adobe said Wednesday that it will eliminate 600 full-time positions, or roughly 8 percent of its workforce, amid weaker than expected fourth quarter earnings.

The company said in a statement that it will deliver fourth quarter revenue between $912 million to $915 million, down from its previous outlook of $925 million to $955 million. Wall Street was expecting revenue of $930 million. Earnings excluding items will be 59 cents a share to 60 cents a share. Under generally accepted accounting principles, Adobe said earnings will be 45 cents a share to 46 cents a share. Adobe’s earnings were helped by two tax items that boosted earnings by 5 cents a share. Wall Street was expecting earnings of 51 cents a share.

Adobe said demand for Creative Suite 4 was weaker than expected and “the main cause for the shortfall in fourth quarter revenue.” Adobe CEO Shantanu Narayen said the global economic downturn hurt revenue.

Hm..  is this shocking to ANYONE?  Really?

Once an economy goes into a downturn, the higher priced software packages are going to feel a lot of the brunt of the problem, especially when the updates aren’t really NECESSARY for most people.  This is especially true in the case of Photoshop.  If you already have CS2 or CS3, and you can get your work done, there is very little REAL reason to upgrade to CS4.  Sure it’s faster, and sure it has new features, but if your company is on the brink of going out of business, the last thing you’re going to do is spend $1600 per computer for Adobe Software that you already have working versions of.

This should be a serious message to Adobe.   There is no reason you should still be charging thousands of dollars for this software!  There are parts of Photoshop that haven’t changed since version 5, possibly even farther back.   Most of that work is done and paid for.  Not to mention that lowering the price would likely cause people to pirate the software less.

Here’s a price point that would cause people to actually buy and use your software without it being the most pirated piece of software on the internet:  $99.    That’s right, $99.  It’s expensive enough to let people know it’s professional grade software, but cheap enough that it can be bought on a whim at  your local Staples.  I know I’d certainly be more likely to pick up a copy of the new Photoshop at $99 than I would be to UPGRADE my current version for hundreds of dollars.

My point is, that with the flourishing complexity and quality of low-cost and open source options ( Pixelmator and GIMP in Photoshop’s case ), the era of thousand dollar software is quickly coming to a close.  Tough economic times will cause people to either stick with the software they’ve already purchased, or if that option doesn’t exist, to move to a less expensive or open source option if possible.

I hope Adobe learns the lesson before it costs them their business.