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Software Giant Autodesk to Axe 13% of Global Workforce

126 points by tashapenguin 9y ago

pzone 9y ago
The 2016 layoffs of similar magnitude didn't seem to make a noticeable impact in their software's update cadence. They are a company formed though an old sediment of mergers and acquisitions and I'm not surprised they've built up inefficiencies.
- stctgion 9y ago
  Do you realize that calling people inefficiencies sounds rather cold?
  - fapjacks 9y ago
    Well, organizations are made of people, and organizations can and do have inefficiencies. I completely understand what you're saying, but wouldn't we just be using code words if we said something else?
  - pc86 9y ago
    Saying objectively that 12 people are doing the work of 8 isn't making any value judgment on the 4 people who get let go.
  - maxlybbert 9y ago
    That’s not how I read the comment. I took it as “inefficiencies in procedures or how departments communicate.” But it’s true that making the place more efficient will lead to layoffs. It doesn’t have to; they could just as easily use the same people to do more, but apparently the managers don’t have any ideas for what else to do.
- Frogolocalypse 9y ago
  They're a company that is selling a product that has already saturated the market.
- wlesieutre 9y ago
  I don't think the update cadence will change, their yearly release numbers are a big marketing point that they're locked into. Press coverage from skipping one wouldn't be good, especially since people feel like that cadence is what they're paying for with the subscriptions. That said, Autodesk has entire industries locked into subscription pricing with very little real competition. If they wanted to cut costs, they could slow the rate of development and get away with it (at least in the short term). Still yearly releases, but without as much in them. What are you going to do, cancel your AutoCAD and Revit licenses? Good luck working on any architecture projects!
  - sitkack 9y ago
    They have only picked up development speed in the last 5-8 years or so. There was the previous ten years where things were largely stagnant. They used their market position to scoop up everything industrial design. Hell, they even bought EagleCad.
    - JBlue42 9y ago
      Yeah, I think they'll have to be on a faster cycle to justify the their new licensing scheme vs the old perpetual ones.
      - Frogolocalypse 9y ago
        As a person who makes these decisions in an engineering company, I can tell you for the first time management is now coming around to the fact that the autodesk licensing model needs to be contained and reduced. For a good 50% of drafting (perhaps much more), zwcad will do. It has a .NET and lisp dev environment, and many tools run natively. Most importantly, the application can be purchased permanently. The autocad product for almost all drafting is essentially unchanged in 15 years, and yet the yearly licensing cost is now more than the total capital cost that was originally incurred. Autodesk is really starting to look like they're pricing their own product out of the market. Will it be completely removed? Probably not. But if you can translate CAD formats from consultancies into the format for your work, and then transfer them back, and the solution to doing that costs 50K to develop, and saves you 150K a year, it's hard to ignore. The only reason I think it hasn't happened up until now is the boiling frog situation. But the frog can't take much more heat.
analognoise 9y ago
I hope this doesn't effect the team working on EAGLE. EAGLE sucks, but it has gotten much better since Autodesk took over and actually started making improvements.
- cinquemb 9y ago
  Who knows, maybe it's a chance for Kicad to take off ;)
  - buserror 9y ago
    Yeah, as an Eagle customer, I flatly refused to go to their new subscription model. Instead, I learned Kicad! :-)
- LeifCarrotson 9y ago
  I hope the same for the teams working on 3DS and Maya. For the ordinary product design/CNC workflow, Solidworks has been knocking the pants off of Autodesk for the past several updates. It's overwhelmingly more popular with new engineers. They do have a few electrical and civil engineering products that are hard to find elsewhere (and very hard to migrate from), but the bread and butter of a CAD software company is that Inventor/AutoCAD/Fusion CAM workflow, and Solidworks is just so much easier to use and equally powerful.
  - leon_sbt 9y ago
    I was a heavy user of Solidworks. I switched over to Fusion 360. In my experience, I found Fusion 360 to be a better experience. The ability to do parametric modeling, surfacing, CNC toolpaths,PDM data storage, "cloud" FEA solving. Everything just works. I don't need to manage licensees from multiple vendors. Set up runboxes for simulations. Manage my own PDM server (PITA).Or re-learn 3rd party vendor specific UI/terminology. On boarding new team members to projects is as easy entering their email address. Pricing is transparent,straight forward, and reasonable. All my data is auto backed up to "the cloud". Free for personal use, and commercial use under 100k of revenue. After that the pricing is very reasonable and straightforward. $300 year for basic, $1500/year for ultimate. The Ultimate version includes shape optimization, 5 axis machining toolpaths, and a few other things. If you had to piece that together from vendors. Your looking at $40k a year per seat. The value is incredibility hard to beat. Solidworks does have the lead in having a huge 3rd party plugin system,weldements, wire routing. I did get thrown off from the idea of a "mate to the idea of a "joint". It forces you not to use hacky practices when building assemblies. I feel that Fusion 360 has better product direction compared to Solidworks, and with their SAAS based model can update users more frequently, when compared to Solidwork's yearly basis. But honestly both products are VERY good in general. Note:Not affiliated with Autodesk in anyway shape or form, other than as an end user. I just really like Fusion 360.
virgilp 9y ago
Interesting, given how at some point they were given as an example of "old software company that actually managed to hop on the mobile train". Guess the mobile train turned to be less important than originally thought (at least from a revenue perspective).
margorczynski 9y ago
Probably just cutting the standard big-corp fat. If I'm correct their financial results are great, in many areas even improving
- adventured 9y ago
  It's much worse than that unfortunately. Pre-tax income 2013: $310m on $2.3b in sales Pre-tax income 2014: $279m on $2.26b in sales Pre-tax income 2015: $83m on $2.5b in sales Pre-tax income 2016: -$20m on $2.46b in sales Pre-tax income last four quarters: -$544m on $1.95b in sales Net income for 2013 was $247m, for 2014 it was $228m, for 2015 it was $81m. For the last eight quarters, it's nearly a negative billion dollars. Net tangible assets 2015: $676 million Net tangible assets 3Q17: -$1.3 billion Their business is in trouble. To make matters worse, they've got a $24 billion market cap. When times were good in 2013, they'd have been sporting a near 100 PE ratio with that market cap. Today it's particularly crazy, given they've had net negative growth over the last five years and they're losing a lot of money. Fair value in my opinion is closer to 70% lower than what they're trading for right now. That's assuming 30 times earnings on getting back to $230m +/- in net income. In more normal times that 30 PE would be very rich for a zero growth company. A more skeptical look at them, would be they're worth 85% to 90% less than what they're trading for today, if their business continues to contract or remains weak and they struggle to get back to something more like $80m to $100m in net income.
  - ginko 9y ago
    How do they manage such abysmal numbers after essentially monopolizing the CAD software market?
    - adventured 9y ago
      Looking at where their problems are on profitability. R&D costs climbed by nearly $200 million versus five years ago (when their sales were higher than they are today). That increase is equivalent to ten percent of their sales now. By itself, that expense gain is nearly enough to wipe out their old decent profit numbers. "Other" SG&A expenses climbed by nearly $200 million as well. They added around 1,700 to 2,000 employees since the beginning of 2013. Going from ~7,300 to 9,000+. That's probably more than a $200 million total annual cost addition. Then contract sales by $400 or $500 million from those days, and you get a big net financial crush. Simply put, they bet on growth showing up, which has never materialized. To put it into context, their sales for fiscal 2007 were $1.84 billion (versus $1.95 billion the last four quarters; so realistically zero growth for a decade (!)). To throw some more onto the fire, they spent over a billion dollars buying back stock over the last 10-12 years or so ($447 million in 2006 alone). As with companies like IBM, that money obviously should have gone to improving the actual business rather than financial maneuvers (trying to fake EPS growth). Worse yet, as of recently they were still at the faking EPS game (from a year ago): "Autodesk, Inc. today announced a program to repurchase up to 30 million shares of the company's common stock" http://www.businesswire.com/news/home/20160919005222/en/Autodesk-Increases-Share-Repurchase-Program http://www.businesswire.com/news/home/20160919005222/en/Auto... So here's a company, bleeding red ink, whose balance sheet is badly eroding, sales are falling, and the people running the business are spending hundreds of millions of dollars to buy back massively over-inflated shares.
yuchi 9y ago
Can a single damn news source stop using metaphors in their titles?… I infer there’s a huge lay off here…
- lsiebert 9y ago
  Now I'm picturing an onion article about axing employees with actual axes.
- ComputerGuru 9y ago
  It’s not a metaphor, it’s a figure of speech. “Axe” and “slash” are synonyms for “lay off” in American English.
chatmasta 9y ago
Does anyone remember when Autodesk bought SocialCam? What a bizarre acquisition that was. Although it brought us Mike Seibel who's been a great YC partner.
justonepost 9y ago
Lol, I just got an interview offer from Autodesk on Monday via LinkedIn.. Uhh, no thanks.
- GFischer 9y ago
  I've seen that plenty of big companies lay off people with the left hand and continue hiring with the right - usually for different teams on different locations. I'm not as enthusiastic to work in one of those megacorps as I once was, and yes, if they decide to do a layoff round next year you could be affected, but I guess that at the very least you'd have one year of employment there.
  - draw_down 9y ago
    Yes, it sounds like GP’s problem is with the left hand, not the right. And yes, GP could likely get caught up in the next round of layoffs. These seem like reasonable concerns to me. Not sure what your point is.
  - chrisbennet 9y ago
    I'd still be hesitant. When a company is cutting jobs because they are in trouble, they become somewhat unpredictable. The hiring manager you're talking to may himself be out of job in a couple of weeks. Example: Someone my wife knows moved to a different state to take a job with a big financial firm (Fidelity) and they got "laid off" before they even started.
bhouston 9y ago
Much of the layoffs tend to happen in North America and Europe and the hiring is in China I understand at Autodesk. I do not have numbers to back that up though, but it is my understanding.
- chli 9y ago
  As part of this restructuring they are closing the European HQ in Neuchâtel, Switzerland, that's ~230 jobs. [1] We have our offices next door and I feel sorry for them. [1] https://www.swissinfo.ch/eng/business/software-shock_autodesk-to-shut-neuch%C3%A2tel-offices/43716966 https://www.swissinfo.ch/eng/business/software-shock_autodes...
  - teddyh 9y ago
    Hmm. The original founder of Autodesk still lives in Neuchâtel, Switzerland: https://www.fourmilab.ch/ https://www.fourmilab.ch/
Ericson2314 9y ago
I worry that Soon there will be no real investment in "professional" software, the type with a learning curve that makes us more productive rather than more ad-addicted.
- Ericson2314 9y ago
  (Unlike Photoshop, AutoCAD, etc, most enterprise software is insanely arbitrary one-off stuff that essentially exists as hack for $megacorp to avoid teaching their non-devs any programming.)
  - mcguire 9y ago
    I don't know that it is to avoid any programming, but the point is pretty well made. Most of the internal enterprise software I've worked on was intended to follow insane and arbitrary policies that wouldn't stand up to scrutiny as a public product.
santaclaus 9y ago
What products will this effect? Maya is essentially in maintenance mode, so I don't think that will get any worse... Hopefully these employees land on their feet!
- pzone 9y ago
  They've announced the majority of cuts involve terminating a few speculative R&D projects and cutting international sales staff. Maya development doesn't seem slow at all. The new UV toolkit in 2018 is pretty great. On the backend, they migrated to Qt 5 last year, and 2018 introduces major changes to the plugin API aiming for greater stability and backward compatibility.
afinlayson 9y ago
They have done so many 10% or more layoffs in the last 9 years, it's hard to keep track.

126 points by tashapenguin 9y ago

The 2016 layoffs of similar magnitude didn't seem to make a noticeable impact in their software's update cadence. They are a company formed though an old sediment of mergers and acquisitions and I'm not surprised they've built up inefficiencies.

stctgion 9y ago
Do you realize that calling people inefficiencies sounds rather cold?
- fapjacks 9y ago
  Well, organizations are made of people, and organizations can and do have inefficiencies. I completely understand what you're saying, but wouldn't we just be using code words if we said something else?
- pc86 9y ago
  Saying objectively that 12 people are doing the work of 8 isn't making any value judgment on the 4 people who get let go.
- maxlybbert 9y ago
  That’s not how I read the comment. I took it as “inefficiencies in procedures or how departments communicate.” But it’s true that making the place more efficient will lead to layoffs. It doesn’t have to; they could just as easily use the same people to do more, but apparently the managers don’t have any ideas for what else to do.
Frogolocalypse 9y ago
They're a company that is selling a product that has already saturated the market.
wlesieutre 9y ago
I don't think the update cadence will change, their yearly release numbers are a big marketing point that they're locked into. Press coverage from skipping one wouldn't be good, especially since people feel like that cadence is what they're paying for with the subscriptions. That said, Autodesk has entire industries locked into subscription pricing with very little real competition. If they wanted to cut costs, they could slow the rate of development and get away with it (at least in the short term). Still yearly releases, but without as much in them. What are you going to do, cancel your AutoCAD and Revit licenses? Good luck working on any architecture projects!
- sitkack 9y ago
  They have only picked up development speed in the last 5-8 years or so. There was the previous ten years where things were largely stagnant. They used their market position to scoop up everything industrial design. Hell, they even bought EagleCad.
  - JBlue42 9y ago
    Yeah, I think they'll have to be on a faster cycle to justify the their new licensing scheme vs the old perpetual ones.
    - Frogolocalypse 9y ago
      As a person who makes these decisions in an engineering company, I can tell you for the first time management is now coming around to the fact that the autodesk licensing model needs to be contained and reduced. For a good 50% of drafting (perhaps much more), zwcad will do. It has a .NET and lisp dev environment, and many tools run natively. Most importantly, the application can be purchased permanently. The autocad product for almost all drafting is essentially unchanged in 15 years, and yet the yearly licensing cost is now more than the total capital cost that was originally incurred. Autodesk is really starting to look like they're pricing their own product out of the market. Will it be completely removed? Probably not. But if you can translate CAD formats from consultancies into the format for your work, and then transfer them back, and the solution to doing that costs 50K to develop, and saves you 150K a year, it's hard to ignore. The only reason I think it hasn't happened up until now is the boiling frog situation. But the frog can't take much more heat.

analognoise 9y ago

I hope this doesn't effect the team working on EAGLE. EAGLE sucks, but it has gotten much better since Autodesk took over and actually started making improvements.

cinquemb 9y ago
Who knows, maybe it's a chance for Kicad to take off ;)
- buserror 9y ago
  Yeah, as an Eagle customer, I flatly refused to go to their new subscription model. Instead, I learned Kicad! :-)
LeifCarrotson 9y ago
I hope the same for the teams working on 3DS and Maya. For the ordinary product design/CNC workflow, Solidworks has been knocking the pants off of Autodesk for the past several updates. It's overwhelmingly more popular with new engineers. They do have a few electrical and civil engineering products that are hard to find elsewhere (and very hard to migrate from), but the bread and butter of a CAD software company is that Inventor/AutoCAD/Fusion CAM workflow, and Solidworks is just so much easier to use and equally powerful.
- leon_sbt 9y ago
  I was a heavy user of Solidworks. I switched over to Fusion 360. In my experience, I found Fusion 360 to be a better experience. The ability to do parametric modeling, surfacing, CNC toolpaths,PDM data storage, "cloud" FEA solving. Everything just works. I don't need to manage licensees from multiple vendors. Set up runboxes for simulations. Manage my own PDM server (PITA).Or re-learn 3rd party vendor specific UI/terminology. On boarding new team members to projects is as easy entering their email address. Pricing is transparent,straight forward, and reasonable. All my data is auto backed up to "the cloud". Free for personal use, and commercial use under 100k of revenue. After that the pricing is very reasonable and straightforward. $300 year for basic, $1500/year for ultimate. The Ultimate version includes shape optimization, 5 axis machining toolpaths, and a few other things. If you had to piece that together from vendors. Your looking at $40k a year per seat. The value is incredibility hard to beat. Solidworks does have the lead in having a huge 3rd party plugin system,weldements, wire routing. I did get thrown off from the idea of a "mate to the idea of a "joint". It forces you not to use hacky practices when building assemblies. I feel that Fusion 360 has better product direction compared to Solidworks, and with their SAAS based model can update users more frequently, when compared to Solidwork's yearly basis. But honestly both products are VERY good in general. Note:Not affiliated with Autodesk in anyway shape or form, other than as an end user. I just really like Fusion 360.

virgilp 9y ago

Interesting, given how at some point they were given as an example of "old software company that actually managed to hop on the mobile train". Guess the mobile train turned to be less important than originally thought (at least from a revenue perspective).

margorczynski 9y ago

Probably just cutting the standard big-corp fat. If I'm correct their financial results are great, in many areas even improving

adventured 9y ago
It's much worse than that unfortunately. Pre-tax income 2013: $310m on $2.3b in sales Pre-tax income 2014: $279m on $2.26b in sales Pre-tax income 2015: $83m on $2.5b in sales Pre-tax income 2016: -$20m on $2.46b in sales Pre-tax income last four quarters: -$544m on $1.95b in sales Net income for 2013 was $247m, for 2014 it was $228m, for 2015 it was $81m. For the last eight quarters, it's nearly a negative billion dollars. Net tangible assets 2015: $676 million Net tangible assets 3Q17: -$1.3 billion Their business is in trouble. To make matters worse, they've got a $24 billion market cap. When times were good in 2013, they'd have been sporting a near 100 PE ratio with that market cap. Today it's particularly crazy, given they've had net negative growth over the last five years and they're losing a lot of money. Fair value in my opinion is closer to 70% lower than what they're trading for right now. That's assuming 30 times earnings on getting back to $230m +/- in net income. In more normal times that 30 PE would be very rich for a zero growth company. A more skeptical look at them, would be they're worth 85% to 90% less than what they're trading for today, if their business continues to contract or remains weak and they struggle to get back to something more like $80m to $100m in net income.
- ginko 9y ago
  How do they manage such abysmal numbers after essentially monopolizing the CAD software market?
  - adventured 9y ago
    Looking at where their problems are on profitability. R&D costs climbed by nearly $200 million versus five years ago (when their sales were higher than they are today). That increase is equivalent to ten percent of their sales now. By itself, that expense gain is nearly enough to wipe out their old decent profit numbers. "Other" SG&A expenses climbed by nearly $200 million as well. They added around 1,700 to 2,000 employees since the beginning of 2013. Going from ~7,300 to 9,000+. That's probably more than a $200 million total annual cost addition. Then contract sales by $400 or $500 million from those days, and you get a big net financial crush. Simply put, they bet on growth showing up, which has never materialized. To put it into context, their sales for fiscal 2007 were $1.84 billion (versus $1.95 billion the last four quarters; so realistically zero growth for a decade (!)). To throw some more onto the fire, they spent over a billion dollars buying back stock over the last 10-12 years or so ($447 million in 2006 alone). As with companies like IBM, that money obviously should have gone to improving the actual business rather than financial maneuvers (trying to fake EPS growth). Worse yet, as of recently they were still at the faking EPS game (from a year ago): "Autodesk, Inc. today announced a program to repurchase up to 30 million shares of the company's common stock" http://www.businesswire.com/news/home/20160919005222/en/Autodesk-Increases-Share-Repurchase-Program http://www.businesswire.com/news/home/20160919005222/en/Auto... So here's a company, bleeding red ink, whose balance sheet is badly eroding, sales are falling, and the people running the business are spending hundreds of millions of dollars to buy back massively over-inflated shares.

yuchi 9y ago

Can a single damn news source stop using metaphors in their titles?… I infer there’s a huge lay off here…

lsiebert 9y ago
Now I'm picturing an onion article about axing employees with actual axes.
ComputerGuru 9y ago
It’s not a metaphor, it’s a figure of speech. “Axe” and “slash” are synonyms for “lay off” in American English.

chatmasta 9y ago

Does anyone remember when Autodesk bought SocialCam? What a bizarre acquisition that was. Although it brought us Mike Seibel who's been a great YC partner.

justonepost 9y ago

Lol, I just got an interview offer from Autodesk on Monday via LinkedIn.. Uhh, no thanks.

GFischer 9y ago
I've seen that plenty of big companies lay off people with the left hand and continue hiring with the right - usually for different teams on different locations. I'm not as enthusiastic to work in one of those megacorps as I once was, and yes, if they decide to do a layoff round next year you could be affected, but I guess that at the very least you'd have one year of employment there.
- draw_down 9y ago
  Yes, it sounds like GP’s problem is with the left hand, not the right. And yes, GP could likely get caught up in the next round of layoffs. These seem like reasonable concerns to me. Not sure what your point is.
- chrisbennet 9y ago
  I'd still be hesitant. When a company is cutting jobs because they are in trouble, they become somewhat unpredictable. The hiring manager you're talking to may himself be out of job in a couple of weeks. Example: Someone my wife knows moved to a different state to take a job with a big financial firm (Fidelity) and they got "laid off" before they even started.

bhouston 9y ago

Much of the layoffs tend to happen in North America and Europe and the hiring is in China I understand at Autodesk. I do not have numbers to back that up though, but it is my understanding.

chli 9y ago
As part of this restructuring they are closing the European HQ in Neuchâtel, Switzerland, that's ~230 jobs. [1] We have our offices next door and I feel sorry for them. [1] https://www.swissinfo.ch/eng/business/software-shock_autodesk-to-shut-neuch%C3%A2tel-offices/43716966 https://www.swissinfo.ch/eng/business/software-shock_autodes...
- teddyh 9y ago
  Hmm. The original founder of Autodesk still lives in Neuchâtel, Switzerland: https://www.fourmilab.ch/ https://www.fourmilab.ch/

Ericson2314 9y ago

I worry that Soon there will be no real investment in "professional" software, the type with a learning curve that makes us more productive rather than more ad-addicted.

Ericson2314 9y ago
(Unlike Photoshop, AutoCAD, etc, most enterprise software is insanely arbitrary one-off stuff that essentially exists as hack for $megacorp to avoid teaching their non-devs any programming.)
- mcguire 9y ago
  I don't know that it is to avoid any programming, but the point is pretty well made. Most of the internal enterprise software I've worked on was intended to follow insane and arbitrary policies that wouldn't stand up to scrutiny as a public product.

santaclaus 9y ago

What products will this effect? Maya is essentially in maintenance mode, so I don't think that will get any worse... Hopefully these employees land on their feet!

pzone 9y ago
They've announced the majority of cuts involve terminating a few speculative R&D projects and cutting international sales staff. Maya development doesn't seem slow at all. The new UV toolkit in 2018 is pretty great. On the backend, they migrated to Qt 5 last year, and 2018 introduces major changes to the plugin API aiming for greater stability and backward compatibility.

afinlayson 9y ago

They have done so many 10% or more layoffs in the last 9 years, it's hard to keep track.