Autodesk Announces Restructuring15 Jan, 2009
Company cutting workforce by 10%, plans to consolidate facilities.
Autodesk announced today a restructuring plan to reduce its annual operating expenses. The company anticipates the restructuring will result in annual pretax cost savings of approximately $130 million annually starting in fiscal 2010.
As part of its restructuring plan, Autodesk plans to reduce its workforce by approximately 750 employees, representing approximately 10% of the company's global workforce. The company also plans to consolidate certain facilities. The actions announced today are in addition to the ongoing cost reduction initiatives previously announced, which include a hiring freeze, business travel restrictions, and other reductions in its operating expenses.
As a result of this restructuring, the company anticipates taking a pretax charge in the range of $65-$75 million. Approximately $45 million to $50 million in pretax charges will be taken in the fourth quarter of fiscal 2009. Most of the remaining charge will be taken in the first quarter of fiscal 2010.
"Global economic conditions continue to impact our end-user demand," said Carl Bass, president and chief executive officer. "Given the current uncertainty of the economic environment, the cost savings initiatives we are implementing are prudent. Autodesk has a strong cash position and leadership across multiple product sectors and geographies. The company has experienced several economic downturns during its 26-year history, and like before, we fully expect to emerge from the downturn stronger, more efficient, and more competitive."
Autodesk has signed a definitive agreement to spin out its location services business to Hale Capital Partners, a private equity firm. Autodesk believes this move will help position the location services business for greater success in the wireless industry, while allowing Autodesk to focus its on its core business. Details of the transaction were not disclosed.
Autodesk will announce final fourth quarter financial results in a press release immediately following the close of market on February 26, 2009. The company will also host a live conference call and webcast to discuss these results on February 26, 2009 at 2:00 p.m. PT.