Adobe is closing its research and development operations in China in a move that could see as many as 400 employees made redundant.
The company isn’t pulling out of Greater China altogether — it will retain six sales offices across China, Hong Kong and Taiwan — but its R&D branch for the region will close down before the end of the year, a spokesperson told The Next Web.
The news was initially reported by Chinese site Caixin, which speculated the job loss numbers. Adobe did not confirm exactly how many of its Chinese staff will be laid off, but it did say that it will replace “most” of its technical positions with hires at other engineering sites in different locations worldwide as part of an ongoing restructuring process.
Here’s the company’s statement:
“Adobe’s cloud businesses deliver innovation on a continuous basis, and we need our engineering teams focused in fewer sites for greater efficiency and real-time collaboration,” said Donna Morris, senior vice president, People and Places at Adobe. “This is a difficult decision and not a reflection on the great work of our engineering team.”
This move is part of a broader strategy to focus Adobe technical teams in fewer sites, and the company has consolidated from 80 to 56 sites since 2012. The move will not affect Adobe’s overall level of staffing or investment in R&D, which remains at more than 20% of the company’s investment annually.
As part of this shift in focus for Adobe’s China presence, most R&D and technical positions will be replaced at other Adobe engineering sites.
The exact reason for the move is not explained, but it comes at a time of increasing tension for multinational technology companies doing business in China. Microsoft is currently involved in an antitrust investigation and was subjected to raids last month, while Qualcomm awaits the decision of a case against it for alleged price doctoring.
Apple appears to have been affected by the controversy too. The US firm was criticized by state media over the potential privacy issues around its location-sharing feature, while it is still to launch its new iPhone 6 phones in China as it awaits the required permits.
Reuters cites internal sources at Adobe who claim that the R&D closure is a result of “the overall climate in China against Western enterprises [which] has been quite negative.”
That said, Adobe’s business has struggled in Asia of late. Revenue for its last quarter of business was down 25 percent year-on-year, as the company recorded its worst quarter of business for the continent in five years.
Hat tip @niubi