No surprise: Autodesk announces restructuring
You probably saw this coming: a company used to operating on a perpetual license model isn’t, financially, the same as one that relies on subscriptions. Different cash flows, and cash flows are what pay people, rent and utilities. So, today, Autodesk announced a restructuring plan to take into account its new reality. The usual: “Autodesk seeks to reduce expenses, streamline the organization, and reallocate resources to align more closely with the company’s needs going forward.”
In practice: a 10% headcount reduction, which equals roughly 925 positions, and consolidating leased offices. Autodesk doesn’t say what this means in dollar terms, except to say that it expects to take pre-tax charges of around $90 million in severance, lease abandonment fees and the like.
CEO Carl Bass said in prepared remarks, “To be clear, the restructuring announced today is not related to anything we are seeing in the macro-economic environment. 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.” Autodesk said it also expects to be at the high end or exceed prior guidance billings, revenue, non-GAAP EPS, and net subscription additions for the fourth quarter of fiscal 2016.
We’ll know more at the Q4 announcement, scheduled for 25 February.