Re: cost of severance
According to the local newspaper, part of the cost (probably most) is for severance but it also includes "expenses from consolidating leased facilities". So it's not all for employees.
A shame for the people since, while there's some anger in some of the comments above about Acrobat and cost, many of their products particularly Photoshop Lightroom are good.
I suspect though that they may have gotten larger than normal upgrade revenue to CS3 (x86 Mac support, several key new features in Photoshop at least) and then CS4 has less of a compelling set of features for people who just upgraded.