Adobe China employee reveals the inside story of its closure

Many people say that the layoffs are due to poor performance in Adobe China, is that right? If not, what is the reason? Why are the layoffs so sudden? How do people react after the layoffs? What impact will this layoff have on Adobe's development in China? ...An Adobe employee responded to this.

Last week, the news that Adobe China was shutting down came as a surprise to many people. On the one hand, the layoffs were too sudden without any prior notice; on the other hand, the entire R&D department in China was laid off, which was indeed a bit too big a move.

After the layoffs, many media and most industry insiders attributed the layoffs to Adobe's poor performance in China. Is this really the reason? If so, are there other reasons? If not, what are the reasons?

On the second day after the layoffs, the reporter contacted and interviewed Li Desheng (pseudonym), a Dev Lead in the Flash Runtime department of Adobe China, and had an in-depth discussion on related issues.

The severance pay is indeed N+5, but the plan still has problems

About half an hour after the scheduled interview time, Li Desheng finally replied quietly, "Yes, I'm here." This "Yes, I'm here" seemed to explain that they had silently accepted the reality. Yes, his reply confirmed this. In his answer, he said that he had just been trying to get higher compensation from the senior executives from foreign countries, but there were still some differences.

Many people on the Internet have praised Adobe's severance compensation plan for China. A Weibo user said that Adobe's severance compensation for Beijing employees is N+5, where N is the actual salary of the employee, and it is not based on the average salary in Beijing. This is a very generous company, more generous than companies like Microsoft and Oracle.

Then there is a question here, is the compensation plan not the N+5 rumored by the outside world? Or is there a problem with the details of the plan? Li Desheng confirmed in the interview that the compensation plan is indeed N+5, and the plan was also proposed by the company. However, he pointed out that the key is: according to national law, the base of N is the total income of the past 12 months/12, but in their compensation plan, the base of N does not include the stock income of the past 12 months. This is one. Second, many of their employees’ stocks expired in January, and they were not given the stocks that were about to expire, which is still relatively unfair to those who have more stocks. Therefore, they are still fighting for these two points.

In addition, Li Desheng also revealed that some people have a third demand. According to the company's original plan, the 400 employees affected by the layoffs will leave in two batches. One batch will leave at the end of October, and since the company will officially close on December 19, the other batch will leave on December 19. The group leaving in October hopes to postpone their departure until December. Talking about the current progress of the negotiations, Li Desheng said that the company currently hopes that they can find an employee representative to summarize the opinions.

Considering that the layoff compensation for Nokia's division in Microsoft China was N+3, are the employees satisfied with the N+5 compensation? "In fact, there are N+6 and N+7. I personally think the compensation is acceptable, not too high or too low." Then can you tell me the approximate amount? Li Desheng thought for a while and said, "I got more than 200,000 yuan. After all, the base does not include stocks, so it is still unfair to those who have more stocks."

Some employees can choose to work in India or the United States

After the R&D department in China is closed, most of the projects will be moved to India. Therefore, some employees in the R&D department in China are allowed to transfer to India or the United States to continue working, but Li Desheng pointed out that they will not receive compensation if they go there.

According to Li Desheng, the invited employees account for about one-tenth of the total number of laid-off employees (about 40 people), and those who are expected to work in India or the United States may account for one-third of the invited employees, among which Digital Marketing China employees have the most chances to go to the United States. Li Desheng also said that most people would not choose India, but some people are still eager to go to the United States.

Layoffs are decided by VPs and above

When chatting with Li Desheng, I asked him, looking back, were there any signs or clues before the layoffs?

Li Desheng said that the VP did not know about the layoffs, and it should be a decision made by higher-ups. He continued: "There were no obvious signs of layoffs, but there were signs of poor performance. For example, the company has not recruited for a year, and all the interns this year were not retained. But we all think we can survive, after all, we are in a transition period. If we can meet expectations by 2015, the company will be able to resume its growth and development, so I personally always think this has something to do with the Indian CEO."

Later, Li Desheng seemed to have thought of something, and he added: "Our China boss Ning once asked a very formal question to some senior executives during a one-on-one conversation, which was what is the significance of the existence of the China R&D center? I believe this question was also asked by Ning's boss, the VP in the United States, so it may be a precursor."

Li Desheng concluded that since the Chinese region did not have its own core products, it was controlled by others in every way. In addition, the labor cost was high, there was no language advantage, and the company was not optimistic about the Chinese market, which led to the closure.

After learning about the layoffs, most people quietly looked for the next job.

Everyone was surprised by the layoffs in Adobe China, including reporters. So on the one hand, we wanted to know whether they were as surprised as we were. On the other hand, we also wanted to find out how they reacted after learning the news of the layoffs.

Li Desheng said that they officially received the news during a meeting on the morning of the 24th. However, there were rumors of internal information on the 23rd, and he himself learned about the closure from internal sources on the evening of the 23rd. Facing the fact of layoffs, Li Desheng said frankly: "To be honest, layoffs have been considered, but the complete closure is still beyond his expectations, after all, many projects are still being carried out."

What was everyone's attitude after the layoffs? Did they not understand or were they angry? Or did they quietly look for the next job? Li Desheng calmly recounted: "Most people should quietly look for the next job. After all, other foreign companies are also laying off employees, so it's not surprising. Of course, some employee representatives went back to fight for more compensation." But can they get it? "There is definitely room for maneuver, but the company gave us a very limited time and required us to sign the contract before October 17."

Poor performance was just the final straw for closing the R&D department in China

Many people say that the layoffs were due to poor performance in Adobe China. Is this really the reason? During the interview, Li Desheng also expressed his personal opinion on this.

He said that many people said that it was due to poor performance, especially in the second quarter, but he felt that this was just the last straw that caused this to happen. He pointed out that in fact, if you look at Adobe's financial reports in previous years, you will find some "rules", generally the second and third quarters are low, and the first and fourth quarters are high. Such results are related to the market operation model of the technology company itself. Moreover, the main reason for the decrease in revenue this time is that the sales in the Japanese market were not as good as expected, and the operating costs also increased by 30 million, so it has nothing to do with the R&D center in China.

What is the real reason? Li Desheng believes that layoffs are related to the rapid increase in China's labor costs in recent years. You know, China's labor costs are completely no longer advantageous compared to India, not to mention that India has a language advantage. Regarding this point, the CSDN nickname "kittychina" also expressed the same view. In his comment on the article "Users exposed the dissolution of Adobe China, and the official response said it was basically true", he pointed out that China cannot compete with India. China's high rent and high costs have lost their advantages in the world competition. Foreign companies have withdrawn, and Chinese private enterprises are all low-value links, and innovation cannot keep up. Once the economic bubble burst after the hype in the past few years, Chinese software began to go downhill.

Li Desheng also pointed out that another key reason for layoffs may also be related to the business model of software companies. Internet companies are very fast in making things and responding to the market very quickly, while traditional software companies such as Adobe and Microsoft have a very slow pace of software development and are not well aligned with the market. Of course, this is also related to pirated software. So Adobe is now also transforming into a service-oriented company, but after all, it will take time for the transformation to be reflected in revenue. When talking about the progress of Adobe's transformation, Li Desheng quietly shared that the company's plan is to increase global revenue to US$5 billion by the end of 2015 (previously it was all transformation), with profits of around US$500 million.

In addition, Li Desheng also speculated that in addition to these reasons, the layoffs may also be related to the fact that Adobe's CEO is Indian. He said that Adobe's current CEO is Indian, and from his LinkedIn resume, he found that this CEO is from the same village as Microsoft's current CEO Satya Nadella. After laying off 400 employees in China, 300 positions were added in India.

What is Adobe China's R&D mainly responsible for?

Many people don't know that Adobe has set up R&D in China, so some people wonder if the layoffs are also related to the irrelevance of R&D business in China. During the interview, the reporter also asked what the R&D of Adobe China mainly involves.

According to Li Desheng, the Chinese region generally does more testing. Specifically, one-third of the people work on the CC product line, one-third work on Digital Marketing (Digital Marketing China is responsible for many functions), and one-third work on other products. The Chinese region is responsible for part of many product lines. No product is completely in China. The product definition is in the United States, and the Chinese R&D department only implements it. Therefore, the person in charge of the Chinese region also hopes that China can have its own products. In order to have its own products, the person in charge encourages the R&D department to go deep into the customers to explore user needs and develop new products.

Flash Runtime, where Li Desheng works, is working on some innovative projects, and DragonBones and EffectHub are two of their projects. DragonBones is based on FlashPro for skeletal animation, and the animation produced can be directly used in mobile games; while EffectHub is a special effects sharing platform, targeting the game special effects market, where special effects can be shared and traded. Currently, these two projects have begun to generate small income, but have not yet become the company's official products. So what will happen to these two projects after the layoffs? "There are VP-level people in the company who know about this project. I don't know what will happen to these two projects now. The VP from the US headquarters will come over again." Li Desheng replied lightly.

Impact: Layoffs prevent Adobe from hearing the voices of Chinese users

At the end of the interview, the reporter asked Li Desheng one last question - what impact do you think layoffs will have on Adobe's development in China?

"I think the biggest impact is that a lot of hopes have been dashed. There will no longer be products that are fully adapted to the local Chinese market, and Adobe will hear fewer and fewer voices from Chinese users. Adobe will not make any changes for the Chinese market. All its products are global, and sales in China are just trying to sell them to Chinese people."

What to do next? "I'm still considering whether to find a job or start a business. I haven't decided on the direction of my business yet, so I'll look for partners and good ideas first." Li Desheng paused and said, "I've made appointments with a lot of people recently, let's talk first."

Adobe China has sought changes

In China, piracy is an ever-present problem, and the habit of using pirated software is difficult to change at present. What makes Adobe's revenue in China even worse is the high price of Adobe software. Take the Photoshop CS6 version commonly used by Chinese people, for example. The full version costs as much as US$849, equivalent to more than RMB 5,200. This price alone is not something that ordinary companies can afford, let alone individual users.

During the interview, Li Desheng also expressed his own views on this issue. He said that it might be the inherent thinking of software companies, who are unwilling to make software free and then make money from other channels, just like the thinking of the Internet, or like Meitu Xiuxiu. He revealed that the Chinese region has always had opinions on this, but they only have some say in product details, and the headquarters will not listen to the general direction of the product.

In fact, in addition to Adobe's reluctance to make changes, the reporter also thinks that this is related to Adobe's propaganda. In an interview in 2013, the reporter found that (Interview with Xiong Panfeng: Flash is still a treasure in the HTML5 era) many people think that Flash/Air will die and HTML5 is the mainstream in the future. Under this kind of public opinion and trend, Adobe does not seem to have made more efforts to let everyone correctly understand the real situation of Flash development, which has shrunk Adobe's territory to a certain extent.

Reporter's closing remarks: Everyone should reflect

Why would a world-leading digital media and online marketing solutions provider withdraw from China, a market with great potential? I think this is a question that everyone should reflect on.

What we should reflect on is not why Adobe hastily pulled out of China, but the damage that piracy has brought to the Chinese people and this country. For some people, whose income is very little after rent and necessary living expenses, we may really be unable to blame them, because everyone understands that this is not just their problem. As for some people who are not in financial difficulty and are proud of using pirated products, we hope they understand that a group of people are losing their jobs because of their "shameless pride" and our country's software industry has lost hope because of them.

Yes, the second largest software country is now India, which is much poorer than us. Shouldn’t we reflect on this?

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.