April 28 (Bloomberg) -- Adobe Inc., the world’s biggest maker of graphic-design software, will freeze pay this year as the recession crimps sales, said Chief Financial Officer Mark Garrett.

“Clearly, we aren’t going to have salary increases,” he said in an interview. “The bonus plans and variable compensation plans will pay out less. We have set ourselves up for what we think we need to do -- from a costs perspective -- for the rest of this year.”

Adobe also has cut about 8 percent of its workforce, curbed travel and reduced its use of contractors. While U.S. demand is now steady, overseas sales may still be dropping, Garrett said. That revenue accounted for almost 60 percent of Adobe’s total last year.

“In the U.S., things have stabilized, but certainly not improved,” Garrett said. “I’m a little cautious still about Europe and Asia because these things tend to spread from here.”

Adobe, based in San Jose, California, fell 44 cents to $25.70 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have advanced 21 percent this year.

Adobe’s U.S. sales hit bottom in February and the first two weeks of March, Garrett said. The company, which gets weekly reports from its global distribution channels, hasn’t seen any rebound yet, he said.

Creative Suite

In March, the company predicted that sales in the current quarter would drop as low as $675 million, from $886.9 million last year.

Adobe said then that the recession had eroded demand for new versions of its Acrobat software and Creative Suite, which includes Photoshop and Illustrator. Adobe released a Creative Suite upgrade in September, just as the crisis on Wall Street and tightening credit forced customers to curb spending.

About 58 percent of Adobe’s revenue comes from Creative Suite. The latest version, which more tightly integrates Adobe’s flash video software, was the biggest product-development effort in the company’s history.

When preparing quarterly forecasts, Adobe considers gross domestic product, unemployment rates and global spending on marketing, Garrett said.

“I’m no economist, but I think this will be a bit longer of a recovery,” he said. “I hope things will start to improve toward the back half of the year.

Technology spending in developed economies will decline 12 percent this year, Goldman Sachs Group Inc. said last month. Businesses will probably buy more software than hardware products, Goldman Sachs said.

To contact the reporter on this story: Rochelle Garner in San Francisco at rgarner4@bloomberg.net

Last Updated: April 28, 2009 16:24 EDT