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MEMO FROM THE FUTURE: ADOBE

Employee Edition

ALL-HANDS BRIEFING June 2030

SUBJECT: Adobe in 2030 — What's Changed, Where We Are, and What's Next

Team,

This month marks four years since we launched Firefly, our answer to generative AI. I want to talk frankly about where we are, what hasn't gone as planned, and what it means for those of us working here.

THE MOMENT WE'RE IN

If you've been following the news, you know Adobe's stock has fallen 41% from its peak. We've seen churn in Creative Cloud. We've had to make difficult choices about headcount and resource allocation. Some of your colleagues have left us for other companies. That's real, and I don't want to sugarcoat it.

But I also want to be clear: Adobe is not collapsing. We're not becoming a legacy company overnight. We're going through a genuine strategic transition—the kind that every technology company faces when the market shifts underneath you.

Let me explain what happened and what it means.

WHAT WE GOT RIGHT

Before I talk about what went wrong, let's be clear about what we got right.

We invested in Firefly early. When generative AI started accelerating in 2022-2023, we could have ignored it or fought it. Instead, we invested billions in building our own foundation model and integrating it into our products. This was the right call. We're not behind; we're actually ahead of many peers in deploying AI at scale to our customers.

We recognized that creative tools would be disrupted. We didn't bury our heads in the sand. We didn't pretend that Photoshop would be immune to generative AI. We actively worked to integrate AI into our creative suite because we understood that customers would want these capabilities integrated into tools they already loved.

We maintained product quality while adding AI features. Creative Cloud isn't worse than it was in 2026; in many ways, it's better. We've added incredible capabilities—generative fill that actually works, smart object removal, style transfer. These are genuinely useful features that many of you in Design, Product, and Engineering have spent years perfecting.

The problem wasn't execution. The problem was that the market moved faster, and the economics of free alternatives made our value proposition increasingly difficult to maintain.

WHAT WE DIDN'T ANTICIPATE

I'll be honest with you: we missed some things.

The speed of external competition

We thought we had 3-4 years before Midjourney, DALL-E, Runway, and others would be competitive with our tools. We had 18 months.

Why? Because the investment dollars flowing into generative AI startups exceeded anything we'd seen before in tech. Midjourney was founded in 2021 and had millions of users by 2024. DALL-E 3 launched in 2023 and was materially better than Firefly 1.0 at image generation. Runway raised $100M+ and focused entirely on video generation—a domain where we were still building basic capabilities.

We underestimated the power of focused, well-funded startups with a single product and a clear mission.

How quickly "good enough" becomes "good enough"

There's a concept in tech called the "good enough curve." For many years, Photoshop was so dominant that competitors had to be 90% as good and 30% cheaper to gain traction. We had pricing power.

By 2027-2028, that curve shifted. Figma didn't have to be as good as Photoshop for design; it had to be different (collaborative, cloud-native) and good enough. Midjourney didn't have to be as good as Photoshop at image generation overall; it had to be better at generative AI image creation—a new category we invented but didn't own.

We thought our value proposition was "professional creative tools." Customers increasingly saw it as "expensive software for creating assets" when free alternatives could create assets with AI.

The junior designer collapse

This one hurts because it was predictable and we didn't act on it.

In 2026, design studios employed millions of junior designers globally. They were learning the tools, iterating, gradually becoming senior designers. And many were starting at $20/month Photoshop subscriptions and upgrading to the full suite.

By 2028, that role had largely evaporated. AI could handle the repetitive tasks. An art director could generate 50 design concepts in Firefly/Midjourney and pick the best one in 2 hours. This eliminated the work that junior designers used to do.

We knew this was happening. We predicted it in our internal forecasting. But we didn't know what to do about it, so we hoped the premium features and ecosystem lock-in would keep professional demand strong. That hope hasn't panned out.

THE DOCUMENT CLOUD SURPRISE

The one thing that's thrived has surprised many of us: the Document Cloud business.

When Firefly launched, nobody was excited about "AI document processing." It sounded boring. But here's what happened:

Enterprises realized they were drowning in documents. Contracts, financial statements, compliance filings, healthcare records—this unstructured data was their most valuable asset, but nobody could process it efficiently. Manual data entry was expensive and error-prone.

AI changed this. Suddenly, you could extract data from documents at scale. You could classify documents automatically. You could summarize 200-page contracts in 30 seconds.

But here's the key: you needed infrastructure you could trust. PDF processing for a healthcare company processing patient records requires HIPAA compliance. Processing financial documents requires audit trails and security. Processing legal contracts requires integration with e-signature and compliance workflows.

Acrobat became, essentially by accident, the platform for this. We already owned the customer base. We already had security certifications. We already had 27 years of enterprise relationships.

Document Cloud is now the growth engine of Adobe. Revenue is up 31% year-over-year. Customer satisfaction is high. This is a business that enterprise AI automation made more valuable, not less.

WHAT COMES NEXT: THE STRATEGIC SHIFT

Leadership has made a decision about Adobe's future, and I want to be direct about what it means for you.

Adobe is pivoting to prioritize the Document Cloud business.

This doesn't mean we're abandoning Creative Cloud. We're not. Millions of professionals depend on Photoshop, Illustrator, Premiere Pro, and After Effects. We'll continue to maintain and improve these products.

But it does mean that the growth narrative of Adobe is shifting. We're going to hire heavily in document processing, enterprise AI, vertical-specific applications (healthcare document processing, legal contract analysis, financial document extraction). We're going to invest in R&D for these areas.

And on Creative Cloud, we're going to optimize for profitability and retention rather than growth. This means:

THE HONEST CONVERSATION ABOUT HEADCOUNT

I know many of you are wondering: will my role exist in six months?

Here's what's happening:

Creative Cloud organization will reduce by 25-30%. This affects approximately 2,000-2,400 people across Product, Engineering, Design, and supporting functions. If you work on Creative Cloud—Photoshop, Illustrator, Premiere Pro, After Effects, Lightroom—you should assume there's a meaningful probability your team will be affected.

Document Cloud organization will grow by 40-50%. We're hiring 600-800 people. Roles include: - ML/AI engineers - Enterprise sales - Product managers focused on vertical-specific solutions - Solutions architects - Data engineers - Customer success

If you have expertise in AI, enterprise software, and domain-specific applications, there are opportunities for you to move into Document Cloud.

Timeline: - This is not happening overnight. We're announcing it now (June 2030) and executing the reorganization through Q4 2030. - If your role is affected, you'll receive notification by September 2030. - For those exiting, we're offering generous severance (3 months base pay + 1 month per year of tenure, capped at 12 months), extended health benefits (6 months), and career transition support (resume coaching, LinkedIn optimization, interview prep).

I know this is difficult news. Many of you have been at Adobe for years. You've built products you're proud of. And we're asking you to absorb significant change.

The only thing I can tell you is: we're making this decision because we believe it gives Adobe the best chance to win in the next decade. Document Cloud is a genuine growth opportunity. Creative Cloud is no longer a growth opportunity. These are the facts we're operating from.

WHAT DOESN'T CHANGE

Even as we make these changes, some things remain constant:

Our values: We still believe that technology should empower human creativity. We still believe that diversity and inclusion strengthen us. We still believe that doing right by our people and communities matters.

Our culture: We're not becoming a different company. We're adjusting our strategy. The culture of innovation, collaboration, and customer obsession that has made Adobe great will persist.

Our commitment to you: If you're staying, we're committed to investing in your growth and career development. If you're leaving, we're committed to helping you land well.

QUESTIONS YOU MIGHT HAVE

Q: Is Firefly a failure?

A: No. Firefly is a good product. It's embedded in millions of creative workflows. But it's one of several good products in this category. We thought being embedded in Photoshop/Illustrator would be enough to differentiate. It wasn't. The market decided that generative image and video creation is becoming commoditized, and once commoditization sets in, the market picks winners based on price, speed, and specific capability, not ecosystem.

Q: Could we have done something different?

A: Probably. In retrospect, we could have: - Built Firefly as a standalone product at $9.99/month, competing directly with Midjourney, rather than embedding it in Creative Cloud. - Acquired Midjourney or Runway early (2023-2024) before they became too expensive. - Decided in 2027 that Creative Cloud was going to compress and moved resources to Document Cloud earlier.

But these are hindsight insights. At each decision point, the reasoning made sense.

Q: What about my stock options?

A: If you have options, they're likely underwater depending on when you received them. The stock is down 41% from peak. We're not changing our equity compensation strategy, but I'll be honest: if you received options at high stock prices in 2021-2023, they may not be worth what you hoped. This is the risk you took on as an employee of a public tech company.

Q: Is there upside here?

A: Yes. If Document Cloud grows as rapidly as we think—25%+ annually through 2035—and becomes a $8-12 billion revenue business, Adobe's stock can recover and exceed current levels. The company will be smaller but more focused. If you're betting on AI-powered enterprise software as a growth category (which is a good bet), Adobe Document Cloud is a legitimate way to play that trend.

Q: Why not just sell the company or spin it off?

A: Spinning off Document Cloud and selling it would unlock short-term value for shareholders. But we believe we can build something more valuable by keeping the businesses together and redirecting capital. A pure-play document AI company would need to build all the infrastructure we already have. As part of Adobe, Document Cloud benefits from our enterprise relationships, brand, and financial resources.

WHERE I'M AT

I'm not going to pretend I'm thrilled about the situation we're in. I've spent six years building this company, and seeing it face genuine existential pressure is difficult. But I'm also genuinely excited about the Document Cloud opportunity.

In 2026, I thought the future of Adobe was about creative tools getting better, cheaper, more AI-powered. That story is no longer true. But here's the story I do believe:

By 2035, the most valuable software companies will be the ones that help enterprises automate their most important processes. For millions of companies, the most important process is understanding, processing, and acting on documents. That's where the value is. And we have the assets, customer base, and technology to own this space.

That's the story I want to tell. That's what I want us to build.

I know change is uncomfortable. I know uncertainty is anxiety-inducing. But I also know that everyone here has the resilience and skill to navigate this. Some of you will move to Document Cloud. Some will look for opportunities elsewhere. Some will stay on Creative Cloud and be part of maintaining the most important creative software suite ever built.

Whatever you choose, I want you to know: I'm grateful for what you've contributed to this company. You've built things that billions of people use every day. That's exceptional. That will always be true.

Let's figure out what's next, together.

NEXT STEPS

Shantanu

CEO, Adobe

P.S. — I'm aware this is heavy news to absorb. Be kind to yourself and your colleagues this week. Check in on people who might be struggling. That's what community means.