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Autodesk in Flux—Again

Columnist: Bill Meagher
April, 2016 Issue
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Bill Meagher
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Autodesk has a résumé filled with restructures and—wait for it—sackings.

Autodesk is one of the mainstays of the Marin County business scene, so with the software maker streeting more than 900 people across the company (or 10 percent of its workforce), there’s been a lot of talk in local boardrooms, bars, grocery stores and yoga studios.

The AutoCAD designer attributed the firings to cost-cutting attempts as the company transitions from a purchase-based revenue model to one that’s subscription-based, in addition to selling cloud-based products. The company’s been under some pressure over its performance, not just from Wall Street, but from activist investors Eminence Capital LP and Sachem Head Capital. Eminence, a hedge fund with $10.5 billion under management, holds 5.8 percent of Autodesk. Sachem holds 5.7 percent of the software maker and, like Eminence, filed with the Securities and Exchange Commission detailing its ownership positions, which got bigger last November. Sachem also served notice that its ownership of Autodesk shares may come with some free advice for the company’s management regarding its operation—and that it intends to act as a team—it’s also said that the company’s shares are undervalued.

Both funds have also let it be known they want seats on the board of directors.

It’s unknown whether the company’s slashing overhead by cutting its employees loose has garnered support from the hedge funds. The move did cop an 11 percent stock bump the day Autodesk announced the cuts. But chalking up the pink slips to activist investors doesn’t track, given Autodesk’s history.

The company posted a net loss of $43.8 million for the quarter that ended October 31, 2015. For the same quarter the year, before the company showed net income of $10.7 million. For those of you playing at home, that’s a swing of $54 million and change to the bad.

But the thing is, Autodesk has a résumé filled with restructures and—wait for it—sackings.

In 2014, the board of directors OK’d a restructuring where 85 jobs were sliced and four leased properties were consolidated to save the company $15 million. The year before, there was another restructuring with another round of layoffs and more consolidation of real estate. In 2012, securities filings show the company cut 500 staffers.

In the first quarter of 2011, Autodesk’s SEC filings included news of reducing up to 230 jobs, and December 2010 filings showed the company letting 190 employees go. In 2009, Autodesk filings included notes that 750 jobs were to be slashed.

The company opened this year above $60 per share but, a few days after Valentine’s Day, the company was trading for a few cents shy of $45.

The hedge funds didn’t return phone calls seeking wisdom on how the company might do better. An Autodesk spokesman declined to comment regarding the layoffs. As far as the activist investors knocking on the boardroom door, the spokesman said the company always enjoyed hearing from its shareholders. He then added, “especially long-term shareholders.”

No love lost there.

Nothing changes but the changes

Tell me if you’ve heard this one before: The Gateway Plaza in Marin City is remaking itself. Tallen Capital Partners is riding herd for SoCal owners Gerrity Group, which bought the center in 2011 for $36 million. The tenants are being shuffled, with Dollar Tree heading for the exits while Tallen talks with the likes of chains Petco, Blaze Pizza and Buffalo Wild Wings. Tallen is also trying to bring a grocery store in as well as movie theater—but a grocer has been long discussed as a tenant with no food retailer taking the plunge.

Gateway was created in 1995 when the Marin City Flea Market, a much beloved Sunday gathering, was given the boot as the county tried to provide local shopping for the Marin City community. But the rest of Marin has largely ignored the shopping center, and a parade of tenants has been in and out of the mall. Gateway has had a challenging time creating its own identity as the other malls along Highway 101 have been around longer and carved out separate niches.

Your Marin moment

San Anselmo’s Ron Siegel, a chef with a heavy duty résumé, is manning the stoves at that rustic outpost known as Rancho Nicasio, with a new menu likely to land late this month or early May.

The roadhouse, owned by local musical celeb Bob Brown (think management of Huey Lewis and The News), has always served up tasty tunes accompanied by food that was comforting on the way to West Marin.

And while Siegel has run uptown kitchens at Michael Mina, Charles Nob Hill and the French Laundry, the Rancho is unlikely to be swathed in white table cloths and menu items requiring a translator.

Welcome home Ron.

Bill Meagher is a contributing editor at NorthBay biz magazine. He is an associated editor for the Wall Street-based financial digital outlet The Deal out of its west coast office in Petaluma. You can share story ideas, wry observations and legal threats with him at bmeagher@northbaybiz.com. 



 

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