Adobe Systems will close down its research and development operations in China as corporate tensions rise in the nation due to a government crackdown on foreign businesses.
While its R&D offices will close by the end of December, Adobe (ADBE) will maintain its six sales offices across China, Hong Kong and Taiwan, according to Next Web.
The computer software maker will cut as many as 400 employees from its regional office in China. It plans to replace many of the same positions in other offices around the globe as part of a larger global restructuring.
Since 2012, Adobe has shrunk from 80 technical teams in various regions to just 56, and it doesn’t expect the China office’s closing to impact the company’s overall level of staffing or investment in R&D, according to Donna Morris, senior vice president of people and places at Adobe.
“Adobe’s cloud businesses deliver innovation on a continuous basis, and we need our engineering teams focused in fewer sites for greater efficiency,” said Morris.
While the company hasn’t specified why it decided to shut down its China R&D location over other regions, a source told Reuters that the souring Chinese business climate toward Western companies is a central reason.
The move comes as China cracks down on foreign companies, especially U.S. technology firms, using a 2008 anti-monopoly law as the basis for its investigations.
Microsoft (MSFT) was raided last month by officials and has also been the target of antitrust litigation. Chipmaker Qualcomm (QCOM) was also targeted and is awaiting a decision on price-fixing allegations.
Adobe’s exit from China parallels growing software piracy in the country and the company’s move away from traditional software sales and licenses to a software-as-a-service business model.
Adobe’s sales in Asia have also dropped off recently. Last quarter’s revenue for the region fell 25% year-over-year, the worst showing in five years.
