Wave Systems Corp. (NASDAQ: WAVX), a developer of enterprise security software solutions, announced today that its Board of Directors and Senior Management have initiated a global restructuring of the Company's business in conjunction with a review of Wave's options for raising capital and pursuing customer transactions and other strategic alternatives.
Wave's restructuring involves immediate steps to reduce the Company's global workforce by approximately 60% from 133 full time employees and contractors to a core team of approximately 54 employees spread across all functional areas. This core team was specifically selected to maintain critical competencies in all strategic technical, sales and administrative functions. The staffing reductions will include a combination of terminations and furloughs, which will provide some flexibility to recall employees if circumstances require. The Company is also exploring potential financing alternatives to bolster its working capital position.
Wave will focus its resources to support its core products, Wave Virtual Smart Card, Wave Self-Encrypting Drive Management and Wave Data Protection Suite software solutions, its key customers and prospects for these solutions, along with a select group of strategically important OEM partnerships.
In the face of difficulties in completing large enterprise sales engagements for Wave's hardware-rooted security solutions, management and the Board determined that Wave could no longer avoid deep staffing cuts which are estimated to reduce quarterly operating expenses by 50% to approximately $3.5 million per quarter from approximately $7.0 million.
Bill Solms, Wave's CEO and President, commented, "While we continue to believe that Wave's software solutions provide strong and highly differentiated solutions for network, device and data security, delays in sales execution combined with waning financial strength and access to capital required the Board to take these significant actions. We believe these measures will make our operations more efficient for continuing work with existing customers and partners, while also providing us with more time to explore options for raising capital and pursuing customer transactions and other strategic alternatives in a deliberate manner. We believe that this smaller, more agile team will put Wave in a better position to pursue those options."