Shares of enterprise software giant Micro Focus International plc plunged a stunning 46 percent today following the abrupt resignation of Chief Executive Officer Chris Hsu.

Both developments are tied to the British company’s release of a revised revenue forecast for the fiscal year ended Oct. 31 that paints a bleak picture of its future. The firm expects to see sales drop between 6 and 9 percent, a major increase from the 2 to 4 percent decline forecast before.

Micro Focus blamed much of the projected drop on “one-off transitional effects” relating to its acquisition of Hewlett Packard Enterprise Co.’s software business last year. The group, which was headed by Hsu (pictured) before he jumped over to the British company, cost Micro Focus a hefty $8.8 billion.

There are several reasons why the deal is expected to continue dragging down the firm’s finance sheet in the coming months. The first is that Micro Focus’ effort to integrate its internal sales systems with HPE Software’s into a unified platform has been stalled by technical issues. This delay is leading frustrated salespeople to quit in higher numbers than before. Additionally, Micro Focus said that its deal-making operations in North America are facing continued execution challenges.

There is just one small silver lining for the company going into the coming quarters. Thanks to better-than-anticipated progress on an internal cost reduction program, Micro Focus projects that the profit impact of the anticipated revenue declines will be mitigated.

Either way, the leadership team will have its work cut out for it. Chief Operating Officer Stephen Murdoch will take over the reins from Hsu and also has received his board seat. Micro Focus said Hsu “submitted his resignation in order to spend more time with his family and pursue another opportunity.”

Micro Focus Executive Chairman Kevin Loosemore sounded a cautiously optimistic note in a statement about the news. “We remain confident in Micro Focus’ strategy whilst recognising that operational issues have led to a disappointing short term performance and outlook,“ he said. “We believe that Micro Focus is well positioned to help our customers with the increasing pace of change across their Hybrid IT environments and to deliver customer centered innovation.”  

Photo: SiliconANGLE