The New Stuff


Adobe To Shut China R&D As Sour Business Climate Bites


Computer software maker Adobe Systems Inc will shut its Chinese research and development arm, as U.S. technology firms face an increasingly hostile government in the world’s second-biggest economy.

The California-based company will maintain its China sales offices, Adobe said in an e-mail to Reuters on Wednesday, but research and development (R&D) operations will cease by the end of December.

Lay-offs have already begun and will affect more around 300 people, a person familiar with the matter told Reuters.

Foreign companies, particularly U.S. technology firms, have come under increasing scrutiny in China as Beijing pushes hard on information security in the wake of last year’s cyber espionage revelations by former U.S. National Security Agency contractor Edward Snowden.

The government has also ramped up investigations into foreign companies operating in China, wielding a 2008 anti-monopoly law to probe numerous firms’ local practices. Western business lobbies have labeled the tactic as protectionism.

“The overall climate in China against Western enterprises has been quite negative and that’s one of the major reasons,” said the person, who declined to be identified because of the sensitivity of the issue.

The closure of Adobe’s China R&D arm is also affected by rampant software piracy in the country, as well as the company’s shift toward a cloud-based software-as-a-service business model and away from one-off boxed sales of software and licenses, the person familiar with the situation said.

“Adobe’s presence in China will be focused on market development activities moving forward, and it will be dissolving and closing its research and development (R&D) branch there,” the company said. “Adobe will maintain its sales presence in Shanghai, Beijing, Guangzhou, Shenzhen, Hong Kong and Taiwan.”

Other U.S. technology firms which have drawn the ire of China’s government include software giant Microsoft Corp and chipset maker Qualcomm Inc.

Microsoft is the target of an anti-trust investigation for suspected issues concerning its Windows blog/africa-2″ title=”View all articles about africa here”>” title=”View all articles about operating system here”>operating system and Microsoft Office. The probe has been described as “Kafka-esque” by experts because of Microsoft’s negligible revenues in China due to piracy.

Last week, Adobe reported its worst quarterly revenue for Asia in the last five years. For the three months ended August 29, sales in Asia fell 25 percent to $148.2 million.

Recently Published


BlackBerry Sells 200,000 Passport Smartphones in Two Days

BlackBerry’s still got some fight in it yet: The beleaguered ...


Flipkart, Amazon, Snapdeal Gear Up For Festive Season

If Amazon chief Jeff Bezos had wanted a ringside view of the intense ...

apple 2

Apple To Launch Next-generation Retina iMacs In October

Next month we could see all-new iMacs from Apple sporting OS X ...


Google Shuts Down Orkut After A 10-year Run

Internet search titan Google has finally downed the shutters of its ...

A photo illustration of a man silhouetted against a Nokia logo

Nokia Says Not Liable In Mexico Damages Ruling On Former Unit

Finland’s Nokia said on Monday the liabilities of its former ...

An eBay sign is seen at an office building in San Jose, California

Launching Marketplace, eBay Aims To Drive Consolidation In Russia

Internet auction site eBay intends to drive a wave of consolidation ...

The Chinese and U.S. flags fly over signs of Alibaba Group Holding Ltd hung on the facade in front of the New York Stock Exchange before the company's initial public offering (IPO) under the ticker "BABA" in New York

Alibaba Leads Global Equity Capital Markets Treasure Hunt

Global equity capital markets returned with a vengeance in 2014 as ...


The Google Formula For Success

Can Google’s winning ways be applied to all kinds of ...

iPhone 6 and 6C concept2 Martin Hajek 22April-578-80

China OKs iPhone 6 Sale After Apple Addresses Security Concerns

The iPhone 6 will be sold in China from Oct 17, after rigorous ...