UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): July 2, 2012

AVID TECHNOLOGY, INC.

(Exact Name of Registrant as Specified in Its Charter)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2 (b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.05                                             Costs Associated with Exit or Disposal Activities.

On July 2, 2012, Avid Technology, Inc. (the “Company”) committed to a reduction in force and related actions intended to improve operational efficiencies.  The reduction in force impacts approximately 20% of the Company’s employees, including employees being transferred to the entities specified in Item 7.01 below.  In connection with these actions and the divestitures referred to in Item 7.01 below, the Company intends to focus its resources on the media enterprise market and the post and professional market. The Company anticipates that it will complete the reduction in force and related actions during the third quarter of 2012.  The Company expects to incur total expenses relating to termination benefits and facility costs associated with the reduction in force and related actions of approximately $19 million to $23 million, which primarily represent cash expenditures. The Company expects to record the majority of these charges in the quarter ended June 30, 2012.  In aggregate, the annualized cost savings, excluding product material cost, estimated to be realized by the Company from these actions and the divestitures referred to in Item 7.01 below are approximately $80 million.  These savings will appear in both the Company’s cost of sales and operating expenses.  In addition, the Company expects overall gross margins to improve in the second half of 2012 and further improve in 2013 due to favorable product mix and the Company’s cost reduction efforts.

The Company is still evaluating the impact of the reduction in force and related actions and the divestitures described in Item 7.01 below on its financial statements for the quarter ended June 30, 2012.

Item 5.02.                                        Departure of Directors and Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(b)                                 Effective July 2, 2012, Kirk E. Arnold will cease to serve as the Company’s Executive Vice President and Chief Operating Officer.

Effective August 10, 2012, Jason G. Burke, the Company’s Vice President of Finance and Principal Accounting Officer, will be ending his employment with the Company.

Item 7.01                                             Regulation FD Disclosure.

On July 2, 2012, the Company issued a press release, attached as Exhibit 99.1 to this Form 8-K, announcing that it has initiated a series of strategic actions to focus the Company on its media enterprise and post and professional customers and to drive improved operating performance.

As part of these actions, the Company is divesting its consumer businesses.  The Company has entered into an Asset Purchase Agreement (the “Audio APA”) with Numark Industries, L.P. (“Numark”) pursuant to which the Company agreed to sell its group of consumer audio products and certain related assets to Numark.  The sale is expected to be consummated on or about July 2, 2012. The aggregate purchase price payable to the Company pursuant to the Audio APA is approximately $13.9 million, subject to adjustment for closing inventory levels, with approximately $2 million to be held in escrow as security for the representations, warranties, covenants and agreements made by the Company pursuant to the Audio APA. The Audio APA includes customary representations, warranties and covenants by the parties.

The Company has also entered into an Asset Purchase Agreement (the “Video APA”) with Corel Corporation (“Corel”) pursuant to which the Company has agreed to sell its group of consumer video products and certain related assets to Corel.   The sale is expected to be consummated on or about July 2, 2012.  The aggregate purchase price payable to the Company pursuant to the Video APA is $3 million, with $0.6 million to be held in escrow as security for the representations, warranties, covenants and agreements made by the Company pursuant to the Video APA. The Video APA includes customary representations, warranties and covenants by the parties.

A conference call to discuss the divestitures and the other actions taken by the Company on the date hereof will be held at 12:00 p.m. ET on July 2, 2012. The call is open to the public and can be accessed by dialing 719-325-2234 and referencing confirmation code 2084154.  The call and presentation slides will also be available on the Company’s website. To listen to the call and to view the slides, go to http://ir.avid.com/events.cfm prior to the start of the conference call.  A subsequent replay of the call will be available on the Company’s website.

The information contained in Item 7.01 of this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

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Item 9.01                                            Financial Statements and Exhibits.

(d)                                 Exhibits.

*  Document furnished and not filed.

Safe Harbor Statement

This Form 8-K contains statements regarding the work force reduction, total estimated termination benefits and facility costs and expected consummation of the two divestitures, which are “forward-looking statements” as defined under Section 21E of the Securities Exchange Act of 1934.  Such statements are based on the current assumptions and expectations of the Company’s management and are neither promises nor guarantees but involve risks and uncertainties, both known and unknown, that could cause actual results to differ materially from those discussed in the forward-looking statements.  There can be no assurance that management’s expectations or forward-looking statements will be achieved. Important factors that could cause actual results to differ materially from those presently expected include: challenges in successfully implementing the reduction in force and related actions, unanticipated delays in the implementation of the reduction in force and related actions, unanticipated costs and expenses relating to the implementation of the reduction in force and related actions, and other events, factors and risks previously and from time to time disclosed in the Company’s filings with the Securities and Exchange Commission, including, but not limited to the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.  The “forward-looking statements” included herein are made only as of the date of publication and the Company undertakes no obligation to update the information set forth in this Current Report on Form 8-K.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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EXHIBIT INDEX

*  Document furnished and not filed

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Exhibit 99.1

PR Contact:                                 Ian Bruce, Avid, 978.640.5584, ian.bruce@avid.com

IR Contact:                                    Tom Fitzsimmons, Avid, 978.640.3346, tom.fitzsimmons@avid.com

Avid Divests Consumer Businesses and Streamlines Operations

Focuses on Media Enterprises and Professionals

BURLINGTON, MA— July 2, 2012—Today Avid® (NASDAQ: AVID) initiated a series of strategic actions to focus the company on its Media Enterprise and Post & Professional customers and to drive improved operating performance.  As part of these actions, the company is divesting its consumer businesses.  With these changes, Avid will concentrate on core markets where its deep domain expertise, track-record of technical innovation, and strong brand offer the greatest opportunity for success.

“The changes we are announcing today make Avid a more focused and agile company,” said Gary Greenfield, CEO of Avid. “By streamlining and simplifying operations, we expect to deliver improved financial performance and partner more closely with our enterprise and professional customers. Our objective remains to provide these customers with the innovative solutions that allow them to create the most listened to, most watched and most loved media in the world.  I’m excited about our future prospects.”

Avid has agreed to sell its consumer audio and video product lines. The company’s consumer audio products are being sold to inMusic, the parent company of Akai Professional, Alesis and Numark, among others. Headquartered in Cumberland, Rhode Island, inMusic’s brands are best known for producing innovative products for music production, performance and DJing. The products involved in this transaction include M-Audio brand keyboards, controllers, interfaces, speakers and digital DJ equipment and other product lines. Avid will continue to develop and sell its industry-leading Pro Tools® line of software and hardware, as well as associated I/O devices including Mbox and Fast Track.

Separately, the company’s consumer video editing line is being sold to Corel Corporation, a consumer software company headquartered in Ottawa, Canada. The products involved in this transaction include Avid Studio, Pinnacle Studio, and the Avid Studio App for the Apple iPad®, as well as other legacy video capture products.

The divested product lines contributed approximately $91 million of Avid’s 2011 revenue of $677 million.  As part of the transactions, certain employees of Avid will transfer to each acquiring company.  Avid estimates that the proceeds from these transactions will be approximately $17

million, subject to closing inventory adjustment, with a portion held in escrow.  Both transactions are expected to close today, July 2, 2012.

Avid also plans to reduce the number of its employees as it streamlines operations, with approximately 20% of its permanent employee base impacted by the divestitures and headcount reduction plans.   The company currently expects to incur a restructuring charge of approximately $19 to $23 million related to these actions and other associated measures.

The company’s cash balance on March 31, 2012 was $49.7 million.  The proceeds from the sale of these product lines should offset most of the restructuring charges paid in 2012.

Conference Call

A conference call to discuss these actions has been scheduled for today, July 2, 2012 at 12:00 p.m. ET. The call will be open to the public and can be accessed by dialing (719)-325-2234 and referencing confirmation code 2084154.  The call and presentation slides will also be available on Avid’s website. To listen and view the slides, go to http://ir.avid.com/events.cfm prior to the start of the conference call.

Use of Forward-Looking Statements

This release may include forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995. Statements in this press release that relate to future results or events are forward-looking statements and are based on Avid’s current estimates and assumptions.  Forward-looking statements may be identified by the use of forward-looking words, such as “anticipate,” “believe,” “should,” “estimate,” “expect,” “intend,” “confidence,” “may,” “plan,” “feel,” “could,” “will,” and “would,” or similar expressions. Actual results and events in future periods may differ materially from those expressed or implied by these forward-looking statements because of a number of risks, uncertainties and other factors, including:  Avid’s ability to execute its strategic plans and meet customer needs; Avid’s ability to realize operational and financial benefits from the sale of its consumer audio and video product lines and the reduction in workforce announced today; its ability to produce innovative products in response to changing market demand, particularly in the media industry; competitive factors; fluctuations in its revenue, based on, among other things, Avid’s performance in particular geographies or markets, fluctuations in foreign currency exchange rates, and seasonal factors; adverse changes in economic conditions; Avid’s liquidity; and other risk factors and uncertainties disclosed previously and from time to time in Avid’s filings with the U.S. Securities and Exchange Commission. In addition, the forward-looking statements contained herein

represent Avid’s estimates only as of today and should not be relied upon as representing the company’s estimates as of any subsequent date. While Avid may elect to update these forward-looking statements at some point in the future, Avid specifically disclaims any obligation to do so, even if the estimates change.

About Avid

Avid creates the digital audio and video technology used to make the most listened to, most watched and most loved media in the world — from the most prestigious and award-winning feature films, music recordings, television shows, to live concert tours and news broadcasts. Some of Avid’s most influential and pioneering solutions include Media Composer®, Pro Tools®, Interplay®, ISIS®, VENUE, Sibelius®, and System 5. For more information about Avid solutions and services, visit www.avid.com, Flickr, Twitter and YouTube; connect with Avid on Facebook; or subscribe to Avid Industry Buzz.

© 2012 Avid Technology, Inc. All rights reserved. Product features, specifications, system requirements and availability are subject to change without notice.  All prices are MSRP for the U.S. and Canada only and are subject to change without notice.  Contact your local Avid office or reseller for prices outside the U.S. and Canada.  Avid, the Avid logo, Fast Track, Media Composer, Pro Tools, Interplay, ISIS, and Sibelius are trademarks or registered trademarks of Avid Technology, Inc. or its subsidiaries in the United States and/or other countries. The Interplay name is used with the permission of the Interplay Entertainment Corp. which bears no responsibility for Avid products.  All other trademarks are the property of their respective owners.

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