Openwave to cut 20% of workforce, investors queasy

Shares of Openwave Systems Inc. continued to slide after the company said it plans to slash 20% of its workforce by the end of the month.
The embattled Redwood City, Calif.-based developer filed documents with the Securities and Exchange Commission outlining a restructuring plan “to simplify and better align the company’s product portfolio with market demand, reduce costs and improve operating efficiencies.” Openwave said the majority of the job cuts-expected to be about 300 positions-would be completed by June 30.
The company said the restructuring will cost as much as $23 million, but save as much as $50 million annually.
Meanwhile, Harbinger Capital Partners extended its offer to take control of Openwave by buying more than 40 million shares of the company. Harbinger lowered its offer from $8.30 to $7.10 per share, however, to reflect a special dividend announced by Openwave earlier in the week.
Already the second-largest shareholder in Openwave, Harbinger would own 62% of the company’s outstanding shares if the deal were to go through. Openwave’s board unanimously rejected the previous proposal earlier this week, however, calling the offer “inadequate.”
Investors continued to back away from the company following news of the job cuts, as shares of Openwave lost ground in after-hours trading Thursday and slid further following Friday’s opening bell. The stock was down 5%, or 42 cents, to $7.92 by midday Friday.