Autodesk, via a press release on the BusinessWire, announced a restructuring plan intended to accelerate the company’s move to the cloud and its transition to a subscription-based business model. Through the restructuring, Autodesk seeks to reduce expenses, streamline the organization and reallocate resources to better serve its needs going forward. Part of this reduction of expenses means 10 percent of its workforce will be laid off — that’s about 925 positions — and certain leased facilities will be consolidated.
“As we progress through our business model transition, we continue to take a comprehensive look at our company to see where we can be more effective and efficient. To realize maximum value for both our customers and shareholders, and as a follow-on to previously discussed cost reduction actions, we are restructuring so we can focus resources on areas that will accelerate the move to the cloud and transition to a subscription-based business,” said Carl Bass, president/CEO of Autodesk.
Autodesk expects these actions will result in additional cost savings in fiscal 2017 and beyond, while reinvesting a portion of the savings in areas critical to its platform and business model transition. The company anticipates taking pre-tax charges of $85 million to $95 million in connection with the restructuring. Autodesk also expects to be at the high end or exceed its guidance ranges for billings, revenue, non-GAAP EPS, and net subscription additions for the fourth quarter of fiscal 2016.
“To be clear, the restructuring is not related to anything we are seeing in the macro-economic environment,” continued Bass. “We ended fiscal 2016 on a high note with very strong fourth-quarter billings growth and continued demand for our subscription offerings. Solid revenues, coupled with continued cost-controls, led to better than expected non-GAAP EPS during the quarter. I’m pleased we were able to deliver these results at such a critical moment in Autodesk’s transition.”
Additional details regarding the company’s fourth quarter financial results and restructuring plan will be provided on the company’s regularly scheduled earnings conference call.
postPerspective has questions in with Autodesk asking how this restructuring will affect the media and entertainment side of its business. More to come…