On a the heels of a disappointing earnings report, San Rafael-based design software company announced that it will reduce its staff by more than 500 positions, or 7 percent of its total workforce.
The restructuring is related to the company’s shift to cloud and mobile computing and would result in a pre-tax charge—a deduction against their profits—of $50 million to $60 million. Approximately $40 million to $45 million of that will be taken in the third quarter fiscal year of 2013.
"This action allows us to continue to invest in recruiting and hiring people who can bring Autodesk the skills and experience that are critical for achieving our mid and long-term goals,” Autodesk CEO Carl Bass said.
As Autodesk continues to invest in cloud and mobile computing, the company is already in the process of hiring new employees and expects to make up that 7 percent within the year, according to spokesman Greg Eden.
The multinational corporation focuses on 3D design software for use in the architecture, engineering, construction, manufacturing, media and entertainment industries. Its worldwide headquarters are located in San Rafael, and the company has offices in Australia, New Zealand, China, India, Japan, Korea, Europe, the Middle East and Africa.
Eden would not comment on which locations would be affected by the restructuring.
The announcement came with the news of a 9.3 percent profit fall for the second quarter, where shares fell 21 percent after hours to $28.25. As a result, Autodesk decreased its revenue outlook for growth to between 4 percent and 6 percent, instead of the originally estimated 10 percent, according to Eden.
“Organizational changes we made within the company earlier this year slowed us down during the quarter,” Bass said. “Despite our second quarter results, the changes better position Autodesk to meet the needs of our customers.”
The restructuring will provide the opportunity to reduce costs and streamline the organization, according to Bass.
Adjusted earnings of 40 cents to 45 cents per share on revenue of $550 million to $570 million are expected this quarter, which ends on October 31.
"Although the economic environment is challenging, our market opportunity and prospects remain strong and we remain committed to achieving our long-term growth targets by the end of fiscal 2015," Bass said.