Imagination CEO Resigns as Company Looks to Restructure
The chip designer also wants to sell its Pure digital radio businesses as its look to cut $21.7 million in expenses over the coming fiscal year.Officials at Imagination Technologies, which supplies graphics chips to mobile device makers like Apple and has sought to expand its reach into such areas as wearables and the data center, are looking to restructure the company after announcing it will take an operating loss for the year and that its 18-year CEO has resigned. The British company on Feb. 8 also announced that it will sell its Pure digital radio business as part of a larger effort to cut as much as $21.7 million in operating expenses during its next fiscal year, which will end in April 2017. Of this, Imagination will invest an additional $2.9 million into its flagship PowerVR multimedia graphics engine. Company officials said in a statement that they believe there are "more appropriate owners" for its Pure business, given the size of the consumer electronics space, and that the company will discontinue operations of the Pure division immediately. Company executives also will review Imagination's entire operations, including how much it spends on R&D. Imagination Technologies and ex-CEO Hossein Yassaie are the latest victims of slowing iPhone sales at Apple and a struggling Chinese economy. Apple last month announced strong revenue in its fiscal first quarter 2016, but officials said that iPhone sales, at about 75 million units, were flat from the same period the previous year. Imagination, which Reuters reported had seen its share price fall more than 80 percent since 2012, relies heavily on iPhones and iPads for its revenue.
"Trading conditions continue to be very demanding," Chairman Bert Nordberg said in a statement. "We need to be very focused on continuing to meet our customers' needs, and commercializing our IP, cost effectively, based on our core business. The measures announced today will allow the business to maintain the necessary investment in key areas, in order to further strengthen our unique IP, technologies and system solutions."