| Discreet's General Manager Paul Lypaczewski cites harsh economic conditions, slow sales |
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Discreet announced today it plans to lay off 30% of its staff in Europe, and move all the remaining employees from its systems business in Europe, the Middle East and Africa to its London headquarters in the Soho district. In a statement to Digital Media Net, the company attributed the layoffs to "difficult economic conditions and shifting market dynamics in the systems business." The company said the layoffs will take effect this fiscal year, which ends for Discreet at the end of January, 2003.
The company vows to stay committed to its UNIX-based systems business, encompassing high end compositing software like Flame, Flint, Smoke, Fire, and Inferno running on SGI workstations. The company still plans release update software this winter, including Inferno 5, Flame 8 and Flint 8. The company also told Digital Media Net it is continuing development on its Discreet Media Architecture, the software it called Strata and Mezzo at last year's NAB, which appeared to be capable of impressive real-time, uncompressed editing and compositing in a high-bandwidth network environment.
Digital Media Net's Charlie White was granted an exclusive interview with Paul Lypaczewski, Discreet's General Manager and Executive Vice President of Autodesk, Discreet's parent company.
DMN: Sounds like some big happenings going on all over the world today.
Lypaczewski: What we're talking about today is Discreet responding to the economic conditions that are out there, as we had announced our intention both for Discreet and positions across all of Autodesk. We've been looking for efficiencies across all of our businesses, and as a result of that, our intention is to centralize our European organization around our Soho office in London. And putting it in perspective, the model that we're using is already one that has been in use for many of the countries in Europe. There have been certain key countries where we have had direct offices, and we had built ourselves an organization in anticipation of higher revenues and higher growth, and looking at the realities of the situation, we can achieve efficiencies and generate the same amount of revenue that were anticipated, in the current circumstances. And most importantly, focus on the quality of customer support and experience that we deliver to them. So with this new organization there will be the same level of support and the same level of experience that we've always delivered to our customers.
DMN: Looks like you had to lay off quite a few people.
Lypaczewski: Well, the intent of the proposal is that about 30% of the Discreet people in Europe that are dedicated to the systems business would be reduced as a function of this.
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DMN: How many people are you talking about?
Lypaczewski: We don't release our numbers publicly, so we speak in terms of percentages. It's unfortunate. You can never diminish the human cost in all this, and needless to say, we're doing everything to make sure that the people are well-treated. The reality of the situation is that many of the people who are involved in this will still be involved in our endeavors, but in a different capacity.
DMN: You might have them freelancing?
Lypaczewski: As an important part of this plan, as we have done in a number of our European countries, our Soho office will work with our various resellers in the various countries, and there are opportunities for our staff with those resellers.
DMN: Was the problem that your products weren't selling as well in Europe, and so you had to reduce staff there? Why did you decide to reduce staff there rather than in, for example, San Francisco?
Lypaczewski: The focus on Europe is the we had ramped up our organization in Europe in anticipation of fairly significant growth. And going into these economic conditions, and realistically speaking, as the opportunity for us on the desktop [Combustion, Cleaner] increases, that does have some impact on the growth curve on the systems business. So going forward, we anticipate that the growth we will see there in Europe will be less than was originally anticipated. It's just restructuring it to be commensurate with the size of the opportunity. The important thing being, at the end of the day, Charlie, we are making sure that we are structured to be a healthy and vibrant business in the long run because that's our commitment to our customers and their expectations of us.
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